Recruitment M&A deal volumes outpace prior year in Q2 2025
There were signs of encouragement for the recruitment and workforce solutions M&A market in Q2 2025, having seen a further 20 deal completions involving UK assets taking place. With 41 deals completed in half 1 2025, this was an increase of over 40% on a subdued half 1 2024.
This is perhaps unexpected given tough trading conditions, as many staffing firms, especially those focused on permanent placements, are still recovering from a low base. But positively from an M&A perspective, buyers are seeing less risk of buying at the top of the cycle.
Many buyers, especially trade and Private Equity (PE)-backed trade, including overseas, have funds and appetite for strategic acquisitions. We’re continuing to see a drive to acquire in order to improve scale, add new niche specialisms and to diversify and build value-accretive sectors adjacent to staffing. We were delighted to support Onex-backed Morson Group’s acquisition of 3B Training in this regard.
The expectation gap between buyers and sellers is narrowing. Multiples may not be stellar compared to boom times, but they are not depressed either. Buyers and sellers alike are finding pragmatic solutions to structure day one consideration and meaningful earn outs to get deals over the line. Businesses demonstrating resilience stand out more in today’s market and, at the other end of the scale, there are still some asset-sale deals with an element of financial distress.
Deals are still taking longer and as processes extend under buyer scrutiny, there are pinch points on nearly every deal, from current trading wobbles to data limitations and from people issues to tax challenges. Therefore, thorough preparation and diligence has never been more important.
The ‘deal readiness’ pre-deal phase is taking longer too. Operationally, many firms are focusing on margin over volume, and right-sizing or rebuilding teams to match the current market and build run rate EBITDA. We are expecting to see this flow through to further deals in the coming months, and likely an increasing quality of deal too as we head into 2026.
Key recruitment M&A themes in Q2 2025
- Overseas buyer interest grows, including from Europe and Australia.
- Demand for recruitment software and platforms continues.
- Add-on acquisitions by PE-backed trade buyers remain a key feature of the market.
- Trade acquisitions continue to be the main exit route.
- Increased acquisition activity by UK buyers of overseas assets.
Overseas buyer interest grows, including from Europe and Australia
Overall, in Q2, 40% of acquisitions of UK recruitment firms came from overseas companies, showing the strategic importance of UK businesses in portfolios.
European buyer interest declined in 2024 but has returned in 2025. In Q2 we saw three European buyer and two US buyer completions, continuing the theme of Q1 when there was an even mix of two European and two US acquirers.
Q2 also saw an additional two overseas buyer transactions, both based in Australia.
Cordish Dixon, an Australian PE firm, provided $24.5m development capital to Cappfinity, a Birmingham based recruitment technology business. Rota Geek, a London-based developer of employee scheduling software, was acquired by ELMO Software, a Sydney-based integrated talent management platform.
US-based Aya Healthcare, who combine healthcare staffing and tech solutions and acquired ID Medical for its RPO platform in 2024, also acquired London-based healthcare platform Locum’s Nest.
Recruitment software and platforms see strong M&A demand
Recruitment software platforms are consistently in the top three most attractive sub-sectors. Q2 2025 was no exception, representing seven of the 20 transactions. Buyers are seeking to build highly scalable platforms in automated recruitment services, or platforms that can streamline their full-service process, from applicant tracking through to onboarding.
A notable deal was the acquisition of Qintil, a digital learning and recruitment platform purpose built for the care sector, by Ireland’s OneTouch Health. This strategic acquisition marks a significant expansion of OneTouch Health’s platform and marks a move to provide care providers with a fully integrated ecosystem.
63% of such deals involved a PE buyer, as PE continues to look for add-ons for existing portfolio companies with The Access Group (backed by Hg and TA Associates) acquiring Eploy in this quarter. Eploy is a developer of applicant tracking and talent acquisition software which will help The Access Group bolster its ability to offer end-to-end HR solutions.
Add-on acquisitions by PE-backed trade buyers remain a key feature of the market
A key theme in the middle market is the increasing importance of PE, and of PE-backed trade buyers seeking scale, on M&A activity. The staffing and workforce solutions sector is no exception. In Q2 2025, five of the eight PE deals were add-ons for existing platforms.
A note of caution here. Of these eight PE transactions, five were recruitment software deals, as discussed above. PE deals for ‘traditional’ staffing firms have continued to be more selective. PE-backed deals included Onex-backed Morson Group’s acquisition of 3B Training, Adama Capital-backed Taskmaster’s acquisition of Midlands-based industrial specialist RE Recruitment, and BGF-backed TCC’s strategic acquisition of the trade and assets of the regulated industries compliance and resourcing business Momenta.
Trade deals continue to be the main exit route
Trade buyers continued to be the preferred exit route with just over half of all deals. Trade deals tend to be diversified across a number of verticals, the most popular in Q2 being particular software platforms and education, together with consulting, healthcare & life sciences amongst others.
Deals included Affinity Workforce Solutions acquisition of the trade and assets of education, healthcare and compliance brands of The Protocol Group, and multinational professional services firm Org Group’s acquisition of niche Oracle tech recruiter Venturi as it seeks to diversify. Org Group is perhaps best known for its Morgan McKinley brand.
UK buyers ramp up overseas acquisitions in Q2
Following a lull in Q1, UK firms completed seven acquisitions of overseas targets in Q2. Four of these deals involved a US target, and three in Europe (two in Benelux and one in Portugal). Mature and PE-backed businesses remain keen to supplement organic growth with strategic expansion and diversification beyond UK markets.
Morson Group, backed by Onex, acquired US based STEM recruiter PTS Advance. The target is one of the largest specialist providers of technical talent to the US oil, gas and manufacturing industries and marks a milestone in Morson’s international growth strategy.
In addition to Morson Group, Org Group also completed both a UK and an overseas deal in Q2, acquiring a Belgian-based tech staffing and consulting firm Enterprise Digital Resources.
Why data and deal readiness are key to recruitment M&A
As the market adapts to ongoing challenges, resilience and data-driven preparation are proving essential for successful transactions.
As Jonathan Wade, Partner at RSM UK states: “with the notable resurgence in M&A activity in Q2 2025, one of the key lessons we’ve seen from transactions in recent months is this: don’t forget the ‘back-office’. The value in using data to evidence key messages and fee income KPI trends should not be underestimated. In our experience, it usually pays to start well in advance – trying to fix limitations late in the day risks a more expensive and protracted deal process, likely eroding value.
We’ve seen a step change in the focus on data in deals in this sector, as is evidenced by the continuing demand for recruitment software, and know from our experience in assisting firms to upgrade their data capabilities, that the real value is in getting this right.”
For further information or to discuss how we could help you realise your business growth ambitions, please contact Jonathan Wade.