Q3 2023 Overview
North American staffing M&A held steady in Q3 2023 at 27 announced transactions — flat with Q2, though still down meaningfully on a year-over-year basis. The stability in volume masked a notable shift in sentiment: despite the lack of sequential growth, a palpable sense of pent-up demand has been building among active acquirers who have spent the past several quarters adjusting to higher financing costs.
Private equity participation was the most significant development of the quarter: nine of the 27 transactions involved PE-backed buyers — eight add-ons and one new platform investment. This elevated participation rate reflects a dynamic identified by Akash Taneja at the outset of the quarter: those with the ability to get creative with financing structures and transaction design are continuing to be acquisitive, while more conventionally financed buyers remain on the sidelines.
Light industrial and commercial staffing led all segments with eight transactions — double its Q2 contribution — a shift that historically signals a broadening of deal activity beyond IT and healthcare. IT staffing and consulting fell from seven transactions in Q2 to four in Q3, though the segment retained its leading cumulative share for the year at 20% of all transactions through Q3. Healthcare staffing contributed five transactions, including Acacium Group’s acquisition of Sumo Medical Staffing in locum tenens.
Momentum Advisory Partners completed its 10th transaction since founding, advising Collab Infotech — a Princeton, New Jersey-based provider of clinical, scientific, and IT staffing founded in 2009 — on its sale to Aequor Technologies, a healthcare, life science, and technology staffing firm based in Piscataway. The transaction reinforced the consistent theme in Momentum’s deals: healthcare IT and life sciences staffing firms with deep client relationships and specialized expertise generate strong buyer competition.
“It seems as if there’s a fair amount of pent-up demand as buyers have adjusted to the higher costs of financing and those flush with cash fight through the tougher market conditions to strategically pursue growth. Based on the number of private equity transactions in the quarter, it appears those with the ability to get creative with financing will continue to be acquisitive. I suspect 2024 will prove to be a strong year for M&A in the staffing industry.”
Akash Taneja, Founder & Managing Partner, Momentum Advisory PartnersSector Highlights
Light industrial and commercial staffing surged to eight transactions in Q3 — up from just four in Q2 — and its performance historically correlates with early-cycle recovery signals in the broader staffing industry. Healthcare contributed five transactions, led by Acacium Group’s locum tenens expansion and BV Investment Partners’ acquisition of The Hardenbergh Group. Executive search contributed five deals. IT staffing and consulting recorded four transactions — below its historical quarterly average — but remains the leading segment cumulatively in 2023. Other professional staffing added five deals spanning accounting outsourcing, legal staffing, and finance & accounting interim placement.
Notable Transactions
Momentum Advisory Partners advised Collab Infotech on its sale to Aequor Technologies — Momentum’s 10th completed transaction. Collab, founded by Sam Matreja in 2009, provided clinical, scientific, and IT staffing and had built deep relationships in life sciences and healthcare IT. Aequor acquired the firm to expand its footprint in clinical IT and gain access to Collab’s established client network. Acacium Group acquired Sumo Medical Staffing, expanding the UK-based healthcare and life sciences staffing group’s U.S. presence in locum tenens. Design Group Staffing acquired Hire Technologies’ IT staffing division in a divestiture, as Hire Technologies continued to rationalize its portfolio — illustrating how larger organizations are shedding non-core units and creating targeted acquisition opportunities.
What This Means for Staffing Founders
- Pent-up demand is real and building. The buyers who have been on the sidelines since mid-2022 have not gone away — they have been adjusting their models, recalibrating their structures, and waiting for the right moment. The Q3 PE activity — nine transactions involving financial sponsors — is one signal that the adjustment period is maturing. Founders who come to market in Q4 or early 2024 may benefit from a release of this deferred demand.
- PE creativity unlocks deals in difficult markets. Eight PE add-ons in a 27-deal quarter is a high participation rate. Firms with existing platforms are finding ways to structure transactions — earnouts, seller notes, rollover equity — that bridge the gap between buyer and seller expectations in a higher-rate environment. Founders who are open to creative deal structures have a wider buyer pool than those requiring all-cash at close.
- Life sciences and clinical IT remain standout niches. The Collab Infotech transaction — a specialized clinical and scientific staffing firm — generated strong buyer interest and a competitive process, consistent with what Momentum has observed across its deals. Life sciences, healthcare IT, and clinical staffing firms consistently generate the most competitive buyer dynamics of any sub-segment.
- 2024 setup is increasingly constructive. At the current pace, 2023 is on track for approximately 120 full-year transactions — a solid baseline. With the Fed’s rate cycle likely near its peak, buyers increasingly comfortable with higher-rate deal structures, and PE firms eager to deploy capital, the conditions for a stronger 2024 M&A environment are taking shape.