Q4 2023 - M&A Overview
- Global M&A activity through December 15 reached $2.9 trillion in value, down 23% year-over-year, according to Mergermarket data. North America deals totaled $1.46 trillion, down 12% from 2022.
- North American staffing M&A transactions volume for the fourth quarter was in-line with the third quarter of 2023. Momentum Advisory Partners noted a total of 27 announced transactions.
- The IT Staffing and/or Consulting segment recorded the highest volume, accounting for one third (9) of all announced transactions in the quarter.
- Of the 27 announced transactions, private equity firms were involved in 17. Of those 17, 10 were completed as add-on acquisitions and seven as platform acquisitions.
- Momentum advised and represented on three transactions this year in the IT staffing/consulting (2) and life science segments.
Although transaction volume was down in 2023, as a firm, we continued to witness strong buyer appetite and interest throughout the year in the companies we represented for sale. Despite the rapid increase in interest rates during the year, leading to higher costs of capital for funding transactions, a lack of confidence in the economic outlook, and a decline in most segments of the staffing industry—particularly healthcare—we’re only down 14% year-over-year in 2023. That’s a relatively modest decline when you put the 2022 activity into perspective, as it was the most active year in terms of transaction volume of the last decade.
2024 will be an interesting year. At the onset, I am quite optimistic, as it appears that the staffing industry is in recovery mode. Coupled with normalizing interest rates, a continuously strong job market, and economic growth, CEO confidence is likely to increase throughout the year. I believe this will lead to continued consolidation in the market.
We recently spoke with Kip Wright, Chairman of INSPYR Solutions. Kip’s experience in the staffing industry spans over two decades and is marked by notable leadership positions at COMSYS, Manpower, Genuent, and now INSPYR Solutions, where he leads the organization’s M&A efforts. As a leading IT staffing and technology solutions provider backed by the support of A&M Capital, the company completed two acquisitions in 2023, one of which was represented by Momentum Advisory Partners. The company is poised to continue its growth trajectory, with a clear strategic vision for additional acquisitions in the upcoming year.
“While 2023 was an unusual year for the IT staffing sector, there were still companies in the space that managed to maintain and even grow their respective businesses. For INSPYR, these companies presented a unique opportunity to diversify our client base and industry presence through targeted acquisitions. As we shift our focus to 2024, we anticipate a rising tide driven by economic trends and pent-up demand, which we expect will yield further opportunities for organic growth and through acquisitions. Our strategy will continue to heavily rely on both as we aim to build the size and scale necessary to compete effectively on a national level.”
Staffing M&A Transactions by Sector
Notable Q4 2023 Transactions
October 11th, 2023 (Houston, TX) Houston based IT staffing provider, Talent Groups, acquired Abacus Technical Services and The InSource Group. The two Dallas, TX based companies specialize in IT staffing and will be consolidated into the Talent Groups platforms and brands. This deal will increase the brands service reach within the different industries. Abacus previously acquired InSource with Steve Gunner taking the role as CEO for both and he will remain in his leadership position at the newly formed Talent Groups.
November 1st, 2023 (Reading, MA) Eliassen Group, an IT staffing group based out if Reading Massachusetts, acquired another provider of IT staffing in the Midwest. SafeNet Consulting was founded in 1994 and based out of Minnetonka, Minnesota. The main point of focus for this acquisition was to increase Eliassen’s Midwestern presence as well as enhancing the process for candidates and clients of service and network.
December 8, 2023 (Chicago, IL) H.I.G. Capital is a Chicago based private equity firm with a focus in the staffing industry. They have acquired Mainline Information Systems, which boasts revenues of over $1 billion out of Tallahassee, Florida and provide the market with IT staffing solutions. The management team has plans to stay in place with the help of H.I.G. Capital and their resources.
Momentum Advisory Partners 2023 Transactions