UK tops M&A chart

Merger & acquisition (M&A) activity in the UK staffing sector is more than twice that of any other European country, according to corporate finance firm Clearwater International.
Mon, 04 Jan 2016 | By Colin Cottell

FROM JANUARY 2016'S RECRUITER MAGAZINE

Merger & acquisition (M&A) activity in the UK staffing sector is more than twice that of any other European country, according to corporate finance firm Clearwater International.

At the launch of Recruiter’s new European FAST 50 at November’s Recruiter Show in London’s Barbican Exhibition Centre, Clearwater UK partner Marcus Archer unveiled research showing that in the 12 months to the end of September 2015, 53 M&A deals were completed in the UK staffing sector. This was more than double the number completed in Germany (24), the second most active territory. The next most active territories were France (14), the Netherlands (14) and Denmark (17). Of the countries researched only the US, where the staffing market is more than two and half times the size of the UK, saw a higher number of deals (88).    

Explaining the strength of M&A activity in the UK, Archer told the audience that the country’s “mature and highly fragmented market creates a huge number of both buyers and sellers”. He said IT was the most active sector for M&As, with 11 deals completed.

More than nine out of 10 (93%) were trade deals, and 91% were domestic rather than cross-border.

The key drivers of M&A were domestic private firms looking for niche acquisitions and private equity firms intent on acquiring fast-growing profitable sector specific recruiters, said Archer.

Clearwater analyst Mark Maunsell revealed the results of research into a selection of deals across the world showing valuations that buyers were willing to pay for staffing businesses rose in line with the size of the target company. Buyers were prepared to pay an average multiple of 6.1 times annual earnings for firms with an enterprise value of between of £20m and £40m, but this rose to a multiple of 10.6 times for firms with an enterprise value of more than £200m.

Maunsell said he expected to see rising levels of M&A activity next year, particularly in IT, health and education.

FINANCIALS: Empresaria reveals fall in profits, but Offshore Services delivers growth

Empresaria’s Offshore Services operations proved to be the shining light in the company’s fortunes in 2023, according to the global specialist staffing group’s annual results.

Financials 27 March 2024

Gi Group trains mental health first aiders to support staff wellbeing

HR and specialist recruiter Gi Group plans to train around 100 mental health first aiders (MHFAs) across the business.

27 March 2024

Recommendations for better integration to support refugees into work

The current integration of refugees system is “broken, expensive, inefficient and damaging” for both refugees and the UK, according to the chair of the Commission on the Integration of Refugees.

Legislation 26 March 2024

HMRC employment tool CEST not updated in five years

The underlying decision engine of HM Revenue & Customs’ Check Employment Status for Tax (CEST) tool has not been updated in five years.

26 March 2024
Top