Q3 2023 – Industry Insights Report

• Global mergers and acquisitions activity fell 36% year-on-year in the third-quarter 2023 and the total transaction value fell to $717.4 billion from $738.1 billion in the same period last year, according to Dealogic data.
• North American staffing M&A transactions volume was flat in the third-quarter 2023. Momentum Advisory Partners noted a total of 27 announced transactions, which was in-line with Q2 2023.
• Light Industrial/Commercial staffing businesses recorded the highest volume, accounting for nearly a third (8) of all announced transactions in the quarter.
• Of the 27 announced transactions, private equity firms were involved nine. Of those nine, eight were completed as add-on acquisitions and one was a platform acquisition.
• Momentum advised and represented the founders of a Healthcare and Life Sciences staffing firm, Collab USA LLC, the firm’s 10th transaction since its founding in July 2020. 

Despite no increase in transaction volume from Q2 to Q3 2023, there was a notable change in sentiment among active M&A participants on the buy-side. “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” said Akash Taneja, founder of Momentum. “Based on the number of private equity transactions in the quarter, it appears those with the ability to get creative with financing and transaction structure, will continue to be acquisitive.”

We recently spoke with Troy Gregory, System One Holdings Chairman and Chief Executive Officer as well as staffing industry veteran of over 20-years. As  the head of the firm since 2008, System One Holdings has been among the most active acquirors of staffing and solutions businesses across the US, completing over 15 acquisitions. Troy remains positive for the coming quarter and new year in terms of the firm’s M&A efforts and had the following to say:

“System One is continuing to aggressively pursue opportunities for acquisition in the staffing industry as part of its growth strategy. We most certainly witnessed a “Covid” spike in 2022 resulting in record revenue in many of the companies we identified and evaluated as acquisition targets. We also noted an uptick in valuation multiples and seller expectations, we believe due to that post-Covid reaction. It’s our view that things are starting to level off and opportunities will continue to present themselves in the foreseeable future. We have not strayed from our core capabilities and continue to be disciplined in our acquisition strategy. Highest on our list of attributes in evaluating a potential acquisition opportunities is company culture and fit. making sure the businesses we acquire, fit in and ensure they will be successful for years to come.”