As the staffing industry continues to
benefit from a positive operating environment across most industry
sectors, owners continue to capitalize on their strong financial
performance by realizing value through either a company sale or
recapitalization transaction.
Noticeably absent from recent M&A activity are most of the
public staffing companies, as staffing industry acquisition
activity remains primarily driven by lesser-known, privately-held
buyers.
Strategic buyers accounted for 94% of the staffing industry
acquisitions in Q1 2019, with private equity funds (financial
buyers) investing in a new platform acquisition accounting for the
other 6% of transactions.
– Financial investors acquired two new platform staffing
investments in Q1 2019, following the 28 new investments in each of
2018 and 2017.
Professional staffing companies (including IT, digital / creative,
healthcare and life sciences) continue to see the most widespread
demand from buyers and investors.
Buyers continue to have very specific criteria as they evaluate
acquisition targets. Acquirers desire companies with a strong blend
of both recurring revenue growth and profitability, with
significant attention paid to customer diversification and the
gross margin impact of potential acquisitions. Proven management
teams desiring to stay on post-transaction also remain highly
sought after.
Staffing Industry Insights – Spring 2019
Sources: SEC filings, S&P Global Market Intelligence, Mergermarket, company press releases and various news sources (e.g., Staffing Industry Analysts, American Staffing Association, The Deal, The Wall Street Journal)
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