IT Staffing Report: Feb. 4, 2016

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Led by IT, staffing M&A volume rises in 2015

It was a strong year for merger and acquisition activity in the staffing industry in 2015. According to our annual recap of deal-making, the total number of publicly announced transactions involving North American staffing companies rose from 70 in 2014 to 92 last year — an increase of 31%. While this is significantly above the number of transactions announced in any single year since the Great Recession took hold, it remains well short of the 126 deals we saw in 2007.

The IT staffing segment was most heavily targeted for acquisition last year, accounting for one-quarter of all deal volume (23 of 92), and nearly doubling the 12 IT staffing firm acquisitions noted in the prior year’s report. The healthcare staffing segment was nearly as active as IT, with 22 firms acquired. Rounding out the list of most-targeted segments were light industrial (12) and professional [those firms doing substantial business across more than one professional segment] (11), which combined to represent another quarter of all staffing deals.

In addition to the 92 acquisitions of staffing firms, the report covers 21 transactions involving “staffing-related” businesses, such as payrolling, independent contractor compliance, vendor management systems and professional employer organizations. We also report inter-regional transactions, involving one firm based in North America and a counterparty based outside North America. We report nine such acquisitions of staffing firms in 2015, and an additional 11 inter-regional acquisitions of “staffing-related” companies.

Will 2016 show another year-on-year increase in deal making? Stay tuned, as the answer to that question will likely be determined in large part by macroeconomic conditions, and leading indicators are presently providing mixed signals.

Corporate members can download the full report here.