Recruitment sector M&A activity quarterly update

Looking back at M&A deal activity in the recruitment and human capital sector in Q1 2022, there were a total of 13 deals during this period. This was down from 19 deals during Q1 2021, which benefited from a stronger push for completions prior to the tax year end than this year.

Private Equity (PE) deals accounted for 46 per cent of deals over the quarter, representing a threefold increase in the number of PE deals compared to the first quarter of 2021. 

This includes growth capital investments such as Soho Square Capital in Oliver James and Business Growth Fund into Apprentify reflecting the high growth curve currently being experienced across the sector. Not included in the data below, we are also seeing healthy refinancing activity and a lot of lender appetite for the sector. Notwithstanding increased lender scrutiny on ‘sustainable’ earnings, discounting Covid-19 catch up volumes, and understanding the working capital build in businesses that are trading strongly.

We are also seeing strong pipeline activity not only on live deals but also with businesses pro-actively preparing for exit in the next 12 months to take advantage of strong market conditions.

A quarter where the volume stats probably don’t tell the full story – underlying market conditions are very strong and the growth in PE deals and high quality international exits such as Nolan Partners is an indicator of strong appetite.

Our pipeline is particularly strong and suggests positive activity is set to continue over the coming months.

Jonathan Wade – Corporate Finance Partner, RSM

 

Transactions

The below table details the transactions occurring within the UK human capital space in Q1 of 2022, with PE deals shown in bold

Transaction date  Company Target Description Investors
March 2022 Candidate ID Limited Developer of a recruitment platform iCIMS, Inc. (backed by Susquehanna Growth Equity and Vista Equity Partners)
March 2022
Morgan Jones Limited Provider of multi-sector recruitment services  Ms. Julie-Anne and Mr. Jonathan Clarke (MBO)
February 2022 Nolan Partners Limited Provider of recruitment services to sports and entertainment agencies Excel SM International (UK) Limited (backed by Shamrock Capital Advisors)
February 2022 Worldwide Legal Research Limited (t/a Legal Monitor) Operator of a global database of lawyers for recruitment, market intelligence Law Business Research Limited (backed by Levine Leichtman Capital Partners)
February 2022 Apprentify Limited Provider of apprenticeship training and recruiting service BGF (minority / growth capital)
February 2022 Nigel Wright Consultancy Limited UK based recruitment and management consulting firm Management Buyout Team of Nigel Wright Group Holdings Limited (with continued support from Baird Capital and Beechbrook Capital)
February 2022 Broomham Recruitment Limited Operator of a recruitment agency Deverell Smith Limited
February 2022 Claro Search & Selection Ltd Provider of recruitment services Rowan Recruitment Ltd
February 2022 Credence Background Screening Limited Provider of pre-employment background verification services for the recruitment and hiring process Certn Inc.
January 2022
Oliver James Associates Limited Provider of fully comprehensive search and selection recruitment services  Soho Square Capital (minority / growth capital)
January 2022 Granite Search & Selection Ltd Operator of a recruitment agency  Indigo 7 Ventures Ltd
January 2022 YunoJuno Limited Operator of an online freelance marketplace created to help businesses find, hire, manage and pay freelancers Mr. Richard Koch
 January 2022 Osmii Limited Provider of advisory and market intelligence services, intended to place senior developers and digital professionals into various start-ups Hitchenor Wakeford Limited

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

For more information, please contact Jonathan Wade.