Recruitment M&As at highest level in five years

Jo Faragher

Merger and acquisition activity in the recruitment sector reached its highest level in five years last year, according to data from research company Evalueserve and M&A International.

The companies found that last year, 136 deals were completed in the sector globally, with a value of $2.4 billion, much of this driven by medium-sized companies looking to grow and compete.

The growing number of deals reflects the fact that increasingly, recruitment companies have been seeking to move into overseas markets such as the Middle East, Latin America and Asia-Pacific.

The research found that most of these deals have been relatively small in size, with the median revenue of companies being acquired at $27.2m, and the median transaction value at $4.1m. Companies that focus on specialist or technical staff were increasingly attractive, with their share in total M&A activity up from 28.4% in 2010 to 33.8% in 2012.

Temporary staffing companies may see an increase in deal activity over coming years, the report added: “The prevalence of temporary staffing is still at low levels. This is set to increase as companies operating in an uncertain post-recession environment favor a temporary workforce over permanent staffing.”

Industrial, engineering and construction companies was one of the most dominant sectors, with 19 firms catering to this sector acquired during 2012.