Human Capital Management M&A Pulse – Q2 2020

HUMAN CAPITAL MANAGEMENT M&A MARKET DYNAMICS

• Global M&A transaction volume within staffing, outsourcing services and software and technology industries (collectively, “Human Capital Management” or “HCM”) in the first half of 2020 declined 38% from last year, with 111 transactions completed through June 2020. The impact of the COVID-19 pandemic and related shutdowns resulted in a sharp decline in Q2 2020, with many deal processes delayed as buyers wait out the current uncertainty.
• Strategic buyers continued to dominate M&A activity in the sector, accounting for 92% of industry transactions vs. just 8% completed by private equity groups (financial buyers) in the first half of 2020.
• Staffing-related transactions comprised the majority of HCM deals, with 66 transactions completed across professional, industrial, healthcare, and IT focused staffing firms. All sectors of the HCM industry were adversely impacted by COVID-19 in 2020, as Staffing transactions were down 41%, Outsourced Services transactions were down 32%, and Software and Technology transactions were down 38% from H1 2019 M&A activity levels.
• North America remained the most active region in H1 2020, with 54 total transactions representing 49% of global HCM transaction activity. EMEA also remained active, with 42 transactions in H1 2020. Total activity in the EMEA region declined from 56 deals in H1 2019, but the region increased as a percentage of global volume, increasing to 38% of global deals in H1 2020 from 31% last year.