U.S. staffing industry M&A activity began to recover in the third quarter of 2020, as deal discussions have resumed. Many staffing deals that were previously placed on hold are coming back to market again and we will likely see an increase in the number of completed staffing M&A transactions both in Q4 2020 and as 2021 progresses.
The staffing M&A market remains highly bifurcated, as buyer demand is strongest for companies that continue to perform well through the pandemic. These companies are most likely to be in the professional staffing sector, including high-growth segments such as IT, life sciences and healthcare.
Strategic buyers accounted for 85% of the staffing industry acquisitions in the first nine months of 2020, with private equity funds (financial buyers) investing in new platform acquisitions accounting for the other 15% of transactions.
Private equity acquired 13 new platform staffing investments in the first nine months of 2020. This follows the 65 new platform investments in the staffing industry made by private equity from 2017-2019.
Even before the pandemic, many of the U.S. public staffing companies were absent from notable M&A activity, as staffing industry acquisition activity remains primarily driven by private equity-owned strategic buyers seeking to scale their existing platforms and create value for subsequent exits.
Read the full report for more details on the U.S. staffing sector, transaction trends and market activity.