Staffing Industry Deal Landscape

According to Duff & Phelps:

The third quarter of 2011 saw 15 staffing industry M&A transactions close, for a total of 44 staffing transactions so far this year.  Large public companies are choosing their targets more selectively, while privately held buyers are becoming more active.  Healthcare, information technology and commercial staffing (including those providing light industrial and clerical staffing services) experienced heightened demand from buyers.  Notable deals announced recently include:

• SFN Group, a leading strategic workforce solutions company, acquired by Randstad Holding NV for $14.00 per common share through a cash tender offer.
• Adecco Group acquired Drake Beam Morin, a New York based outplacement firm with 2010 revenue in excess of $110 million.
• On Assignment acquired HealthCare Partners, Inc., a privately held locum tenens and physician staffing firm headquartered in Atlanta.
• Groupe CRIT SA announced the acquisition of a 75% controlling interest in PeopleLink, LLC, a commercial staffing company based in South Bend, Indiana, with revenue in excess of $100 million.

Buyers are looking for companies that are growing their revenue and increasing profitability.  Specifically, companies with higher-than-average gross margins, direct client relationships, minimal customer concentration and management teams who have committed to post-transaction leadership have enjoyed the most attractive valuation proposals.  Ongoing buyer interest, coupled with continued earnings improvement for most staffing companies, may pose favorable conditions for even more staffing transactions to close in the final months of 2011 and during the early part of the New Year..As you prepare to close out the year, the team at financial advisory and investment banking services firm Duff & Phelps would be happy to talk to you more in person about the challenges and opportunities that the staffing industry deal environment might pose to your organization.