The reported interest of US private equity group Blackstone in acquiring medical recruiter Pulse is a reflection of a strong appetite among private equity for firms in the staffing industry, according to a recruitment sector deal specialist.

The Financial Times reported last week that Blackstone is in talks to acquire Pulse from another private equity group HgCapital.

According to the FT, Blackstone plans to merge Pulse with rival healthcare recruitment agency ICS, in an attempt to create a healthcare staffing market leader in a sector that has annual revenue estimated at £1bn.

Deal specialist Tim Evans told Recruiter: “Private equity is very much alive to the potential for the better quality recruitment firms to ride the wave of returning commercial markets and their increasing human capital needs. So the timing for deals seems good currently.

“Teaching Personnel has recently been sold to Graphite Capital for £45m and there are a number of other deals also being explored elsewhere in the market. So there is clearly an appetite among private equity buyers.”

However, Evans adds: “The key impediment to M&A deals happening remains agreeing a fair valuation between buyer and seller.”

“Interestingly both Pulse and Teaching Personnel are ‘secondary buy-outs’ – when a private equity house sells to another private equity house. This is probably no coincidence as private equity house will tend to be dispassionate about valuation, allowing them to agree on a fair value more easily than with private owners.”

Both Blackstone and Pulse declined to comment as Recruiterwent to press.