Recruitment sector M&A activity quarterly update

The UK recruitment sector is experiencing increasingly buoyant conditions across a number of sub-sectors and this is now flowing through into robust levels of M&A deal volumes and valuations. A further ten deals were recorded during quarter three of 2021, representing a 25 per cent increase from the same period in 2020. A total of 39 deals have now completed in the sector during the first three quarters of 2021, bringing cumulative deal volumes in line with pre-pandemic levels.

Importantly, private equity deals are now very much back on the scene again with 40 per cent of deals in the quarter being private equity backed. This is likely to include processes that perhaps stalled during the pandemic now completing successfully having demonstrated resilience and growth, as well as new processes in attractive sectors such as life sciences experiencing rapid growth. Notable deals include Eton Bridge Partners to Elysian Capital, Meet Recruitment to North Edge (both of which were supported by RSM vendor due diligence) and Marlin Green to Inflexion.

The wider M&A market is experiencing unprecedented levels of activity and this is being reflected in the competitiveness of processes for high quality assets. We certainly expect this trend to continue into quarter four and into the New Year as strategic acquirers and private equity investors continue to implement their acquisition strategies. In addition, the skills shortages continue to drive demand and the economic and political skies appear clearer than they have been for some time.

We’re delighted to see some buoyancy and confidence returning to the market with some well-run businesses being rewarded with strong returns after the challenges of the pandemic. In particular, we’re delighted to have provided vendor due diligence services to both Eton Bridge and Meet Recruitment (alongside another deal remaining confidential) in the quarter and currently have four other live transactions in the space. reflecting both our strong sector credentials and increasing activity in the sector

Jonathan Wade – Corporate Finance Partner, RSM

Transaction highlights

The below captures a selection of the significant transactions occurring within the UK human capital space in Q3 of 2021. RSM provided vendor due diligence services for those highlighted:

Transaction date  Company Company focus Acquirer
September 2021 Energize Recruitment Provider of IT and digital staffing solutions, permanent and freelance  Management buy-out
September 2021 Eyears Childcare and education recruitment  Humly
September  2021 Marlin Green Contract recruitment, technology staffing, technology recruitment and professional services  Inflexion Private Equity Partners, K2 Partnering Solutions
September 2021 Meet Recruitment Recruitment services to the life sciences industry NorthEdge Capital
September 2021 Connected Talent Multi sector, permanent and temporary recruitment Connected Health
September 2021 Caval Recruitment for construction, mechanical, electrical, professional and technical industries NatWest Group
August 2021 idibu Provider of apprenticeships and traineeships Compono
July 2021 PMP Recruitment Multi-sector recruitment, including temporary and contract, contingent and permanent Challenge TRG Group
July 2021 Eton Bridge Partners Interim management search for executives and management positions  Elysian Capital
July 2021 Hireserve Developer of a recruitment software tool designed to manage and streamline the recruitment process.  XCD

Disclaimer: the above information has been aggregated from information within the public domain (sources: PitchBook, Mergermaket) and RSM has made no attempt to verify its accuracy or completeness.

For more information, please contact Jonathan Wade.