Q2 2024 M&A Overview
- Global M&A: The number of global mergers and acquisitions deals decreased by 21%, but the total value of deals increased by 3.7%.
- Strong Rebound: The North American staffing industry experienced a surprising resurgence in M&A activity during Q2 2024, with a total of 35 announced transactions, up 75% from the previous quarter and up 20% from the same period in 2023.
- Broad-Based Growth: This rebound was broad-based across key segments, with Light Industrial/Commercial (9), IT Staffing and/or Consulting (7), Other Professional (7), Healthcare (7), and Search (5) all demonstrating notable activity.
- Notable Transactions: The quarter was marked by two significant transactions, indicating renewed confidence in the market: 1) Kelly Services’ acquisition of Motion Recruitment Partners; and 2) Cognizant’s acquisition of Belcan.
- Limited Supply: Despite the surge in activity, the availability of high-quality deals remains scarce, with competitive bidding for attractive targets.
- Momentum Transaction: Momentum Advisory Partners completed its 11th staffing transaction, advising Connect Life Sciences on its sale to Argosy Healthcare Partners.
While the robust Q2 activity is encouraging, it’s important to interpret these results cautiously. Despite the uptick in transactions, the availability of high-quality deals remains limited. Active buyers in the market report a scarcity of attractive targets, with those that do emerge being quickly acquired.
This suggests that the rebound may be more a reflection of pent-up demand and opportunistic acquisitions rather than a fundamental shift in the industry’s overall health.
Moreover, the broader staffing industry continues to be challenged. According the SIA | Bullhorn Staffing Indicator, hours worked in the US staffing industry in the week ending June 29th decreased by 11% year-over-year. Commercial and Professional staffing hours were both down 11%. Because of this, we find it premature to declare victory despite the strong rebound in M&A activity. The true test will be whether this momentum can be sustained throughout the balance of the year.
For buyers, the current environment demands a discerning and proactive approach. While opportunities exist, they are often scarce and competitive. Rigorous due diligence and a focus on strategic fit are paramount. Sellers, on the other hand, may find themselves in a favorable position due to the limited supply of quality deals. However, realistic valuation expectations and a willingness to adapt to evolving market dynamics are essential for successful transactions.
While the quarter marked a notable turning point in North American staffing industry M&A activity, the sustainability of this rebound remains uncertain. A cautious optimism, combined with strategic decision-making, will be crucial for both buyers and sellers navigating this evolving landscape.
Q2 2024 Breakdown
M&A Transactions Since 2010
- Despite Q1’s dismal start, the market is on pace to reach 110 completed transactions for the full year 2024, on par with 2023 transaction volume.
- Light Industrial/Commercial staffing led the way with nine completed transactions in the quarter, up from four transactions in the previous quarter.
- The healthcare segment, which had no announced transactions in Q1, had seven transactions in Q2, on par with IT Staffing and /or Consulting and the Other Professional segments.
M&A Transactions by Sector
Notable Transactions in the Quarter
May 3, 2024 – Kelly, a leading global specialty talent solutions provider, has entered into a definitive agreement to acquire Motion Recruitment Partners LLC, from Littlejohn & Co. LLC, a private investment firm based in Greenwich, CT. Under the terms of the agreement, Kelly will acquire Motion Recruitment Partners for $425 million in cash to be paid at close, with additional earnout potential of up to $60 million based on certain performance criteria. The transaction closed in the second quarter of 2024.
June 10, 2024 – Cognizant announced it has signed a definitive agreement to acquire Belcan LLC, a portfolio company of AE Industrial Partners and a global supplier of engineering research and development services, at a purchase price of approximately $1.3 billion in cash and stock, subject to customary adjustments. Belcan provides mission-critical digital engineering services for a customer base across the commercial aerospace, defense, space, marine, and industrial verticals, primarily in North America and the United Kingdom.
June 25, 2024 – Argosy Healthcare Partners (“AHP”), a lower middle market private equity fund focused exclusively on healthcare, and a division of Argosy Capital Group, Inc., a diversified investment firm with $3.4 billion in assets under management, announced today a recapitalization and partnership with Connect Life Sciences (“CLS” or the “Company”). The Company provides recruitment solutions to pharmaceutical, biotechnology, and medical device customers. AHP is thrilled to partner with CLS and support its next stage of growth.
Momentum Q2 2024 Transaction
In navigating the complexities of M&A transactions, it is crucial to have someone who comprehends both the financial intricacies and the human elements involved. I can unequivocally recommend Akash Taneja and Momentum Advisory Partners for their outstanding expertise and unwavering commitment.
Jim Owens
Co-Founder & President
WAYNE, Pa., and ORLANDO, Fla., June 25, 2024 — Argosy Healthcare Partners (“AHP”), a lower middle market private equity fund focused exclusively on healthcare, and a division of Argosy Capital Group, Inc., a diversified investment firm with $3.4 billion in assets under management, announced today a recapitalization and partnership with Connect Life Sciences (“CLS” or the “Company”). The Company provides recruitment solutions to pharmaceutical, biotechnology, and medical device customers. AHP is thrilled to partner with CLS and support its next stage of growth.
Connect Life Sciences, headquartered in Orlando, Florida, and founded in 2020 by Jim Owens and Andrew Doucet, provides a range of recruitment services from staff augmentation to project-based services across life sciences. CLS delivers full life cycle resourcing solutions including contract staffing, contract to hire, direct placement, and consulting services. CLS provides these services from research to regulatory affairs with expertise in biostatistics, data management, clinical monitoring, quality assurance, statistical programming, pharmacovigilance, regulatory affairs, medical writing, and data sciences.
Jim Owens, CLS Co-Founder and CEO, commented, “We are excited to announce our partnership with AHP and embark on the next chapter in our journey at Connect Life Sciences. At CLS, we built our foundation on delivering exceptional customer service to our life sciences customers while maintaining a strong and growth-oriented company culture. Through our partnership with AHP, we look forward to reinvesting in our business, driving growth, and scaling. This partnership allows us to better serve our customers by expanding our core capabilities and resources while taking advantage of the sizeable market opportunities across our life sciences end markets.”