Mergers and Acquisitions Update for the Staffing Industry

May 19th, 2012

During the first half of 2012 we have noted several factors that have impacted the current state of the M & A market for Staffing firms

  • More buyers are prepared to pay reasonable values;
  • More sellers are recovering value lost in late 2008 and 2009;
  • It is clear that Private Equity money is available;
  • Sellers have stronger resolve with valuations recovering;
  • Buyers are stepping up for quality staffing firms;
  • It often, but not always takes longer than usual to close a deal;
  • Perhaps, most importantly, more deals are being completed;
  • Sellers are getting better multiples, if they are growing;
  • Buyers are still being cautious with worrying about the seller’s business disappearing; perhaps this is contributing in part to the longer time frames it takes to close deals;
  • Buyers still prefer to use earn outs to share the risk;
  • Deal term lengths are getting shorter as buyers don’t want to pay sellers too much for the buyers investment in the growth of the acquired business, especially if the seller is no longer there;
  • More sellers are coming on the market each month in 2012;
  • While there is no sign of market saturation, the market for M & A can be volatile and change quickly; we could do without any more negative economic news from Europe;
  • Market looks to remain strong through year end at least, if we can survive the upcoming elections;
 For more information or a complimentary confidential discussion, contact: Bob Cohen at 416-229-6462 or Sam Sacco at 910-509-0691. We can also be reached at bob@racohenconsulting.com or sam@racohenconsulting.com.