HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS
- A theme of “specialization” emerged in 2023, with IT and Place & Search representing the most active staffing sectors throughout the year. The number of staffing targets serving both professional and commercial segments fell 42% versus 2022, with active buyers electing to pursue professional-only or commercial-only targets. Additional popular segments include Finance & Accounting, Legal, Engineering, Life Sciences, Education, and Marketing.
- 2024 is providing reasons for optimism in a Staffing M&A environment that’s demonstrated volatility over the past 12 months. Private Equity possesses abundant dry powder which must be deployed, there’s a continued momentum for smaller transactions after significant add-on activity in the latter half of 2023, and converging price expectations between buyer and seller amidst a normalizing valuation environment presents opportunity for more deal closures.
- After a flurry of M&A activity in 2021 & 2022 with abnormally high EBITDA multiples, buyers remain concerned about overpaying for staffing acquisitions and are lengthening the diligence process by up to 60 days. Buyers are also offering higher levels of earnout and expecting sellers to carry notes as opposed to approaching banks. On the opposite side, sellers of strong companies with proven performance and a defensible niche maintain significant leverage.
Human Capital Management M&A Pulse – Q3 2024
Following unprecedented post-pandemic performance in 2022, the Human Capital Management Industry has undergone a lengthy period of “right sizing” as demand for temporary labor has declined and key client industries, such as manufacturing and warehousing, have stagnated in terms of total employment.
Human Capital Management M&A Pulse – Q2 2024
The U.S. Staffing Industry has demonstrated resiliency through the first half of 2024, while advancements in talent acquisition technologies and a strong demand base continue to combat downturns in key client industries, such as manufacturing and warehousing.
Human Capital Management M&A Pulse – Q1 2024
The U.S. Staffing Industry is anticipated to remain mostly flat through 2024 as a result of ongoing normalization following multiple years of record-breaking growth.
Human Capital Management M&A Pulse – Q3 2023
HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS Staffing companies with strong financial performance continue to see attractive transaction outcomes and valuations; however, buyers are increasingly focused on revenue, margin, and earnings sustainability during due diligence. Organizations with limited customer concentration and a proven track record of resilience amidst cyclical pressures can better validate earnings and maintain…
Human Capital Management M&A Pulse – Q2 2023
Halfway through 2023, the Human Capital Management industry has remained steady despite the forecasted 3.2% reduction in market size.