Background and challenge
A leading U.S. provider of environmental, health and safety (EH&S) and engineering consulting services was looking to position itself for a possible sale. The market had experienced slow growth, as new construction growth had been steady while recurring regulation-driven EH&S filings growth had stagnated under the Trump administration. With the new Biden administration in office, the company believed that leveraging its multi-service capabilities post-COVID-19 was key to providing the new owner with a robust platform that would position the company for future growth.
The challenge was in defining and communicating the company’s market dynamics and its growth opportunities. L.E.K. Consulting was engaged to validate and outline the drivers of the market and the impact of historical/future regulations and COVID-19. L.E.K. was also tasked with clarifying the growth outlook of the business and quantifying its resiliency through economic cycles.
Approach and recommendations
We first developed an extensive fact base across the end markets served by the company, highlighting the large market opportunity, the regulatory-driven nature of its services, the historical and expected future impact of primary growth drivers (e.g., regulations, end-market growth, outsourcing and pricing), cross-selling opportunities, competitive positioning, and attractive growth adjacencies.
Additionally, we performed an analytical assessment of each individual market’s performance through economic cycles (including during COVID-19), highlighting the distinct impact of key drivers and the stability provided by servicing a diverse set of markets and end customers.
Results
As a result of L.E.K.’s work, the client was well positioned for the sale process, armed with a compelling story about its market, growth outlook, competitive positioning and stability through economic cycles.
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