IT Staffing Report: April 5, 2018

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IT staffing M&A activity remains steady

SIA recently released its North American Staffing Mergers & Acquisitions 2018 Update report which tracks annual transactions, both in aggregate and by individual staffing segment. The number of publicly announced staffing M&A transactions in North America jumped 28% year-over-year from 69 in 2016 to 88 in 2017. While the increased activity still falls short of pre-recession levels, as seen in the chart below, 2017 still represented the second-highest transaction volume over the past decade.

North American staffing M&A transactions announced by year, 2006-2017

The rise in staffing M&A can be partially attributed to a sharp increase in healthcare staffing transactions. In fact, healthcare overtook IT as the most active segment in 2017 with 19 announced deals. IT staffing was the second-most active segment with 13 transactions, representing 15% of total staffing deals in 2017. This is just slightly off the 15 publicly announced IT staffing deals in 2016. We categorized 14% of staffing M&A transactions in 2017 as “general professional,” which includes a mix of professional staffing segments, and 7% of transactions as “general,” which includes a mix of both professional and commercial staffing; some of the targets within these categories include an IT staffing component.

Turning to geographies, despite just eight transactions of all staffing skill segment types, the US Western region (see illustration below for regional composition), accounted for the most transactions of IT staffing firms (four), followed by the Southeast, Midwest, and Central regions with three apiece. We assign regions based on the headquarters location of the acquired firm.

One trend we have seen more broadly across staffing M&A is an uptick in private equity investment. We identified 12 publicly announced transactions in 2017 involving private equity acquirers, including four IT staffing-related transactions.

In addition to the Staffing Mergers & Acquisitions 2018 Update report, which includes analysis and a full categorized list of 2017 staffing and workforce solutions M&A transactions, corporate members also have access to SIA’s Mergers and Acquisitions Database. The tool contains information collected on 847 staffing and workforce solutions transactions that occurred from January 2014 to December 2017. It also provides drop-down menus that allow the user to select a subset of transactions based on criteria such as geographic region, industry segment, and date range.

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