IT Staffing Report: Feb. 7, 2019

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IT staffing riding the M&A wave

Staffing Industry Analysts recently published its annual Staffing Mergers & Acquisitions: 2019 Update report for North America. The report tracks annual transactions, both in aggregate and by individual staffing segment. Our analysis saw the number of publicly announced staffing M&A transactions in North America climb 27% year over year from 88 in 2017 to 112 in 2018. The jump represents the highest level of activity in 11 years as deal volumes returned to pre-recession levels.

Catalysts contributing to the surge in activity include: 1) continued expansion of private equity investments into the staffing industry, particularly within professional staffing segments such as healthcare and IT; 2) corporate tax cuts enacted at the end of 2017 bolstered balance sheets and thus, increased the appetite for strategic acquisitions; and 3) acquirers favored specialized staffing firms that could either establish or extend a footprint within targeted staffing segments.

Consistent with 2017, IT staffing was the second-most targeted segment with a 15% share of total staffing acquisitions in North America, behind only healthcare staffing at 24%. The 17 IT staffing deals 2018 is an increase from 13 in 2017.

North American staffing M&A transactions announced by year, 2016-2018

Source: SIA

Acquirers of IT staffing tended to be small-to-medium sized businesses in 2018. A few, however were led by firms listed in our Largest IT Staffing Firms in the United States: 2018 Update, including two transactions by DISYS, one by Artech Information Systems and one by Mitchell Martin. Optomi, which listed prominently in our Fastest-Growing US Staffing Firms: 2018 Update was also acquisitive in 2018.

In addition to the Staffing Mergers & Acquisitions report, which includes analysis and categorized detailed lists of M&A deals in the staffing and workforce solutions ecosystem completed in 2018, corporate members also have access to SIA’s Mergers and Acquisitions Database. The updated tool contains information collected on 1,143 staffing and workforce solutions transactions that occurred from January 2014 to December 2018. 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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