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”) increased 83% in Q1 of 2021 from last year, with 123 transactions completed. M&A activity continued to make a strong rebound from COVID-19 in Q1 as buyers looked for investments as some of the uncertainty in the market subsided and capital was available at attractive interest rates.
- Strategic buyers continued to dominate M&A activity in the sector, accounting for 85% of industry transactions vs. just 15% completed by private equity groups (financial buyers) throughout Q1 of 2021.
- Staffing-related transactions comprised the majority of HCM deals, with 51 transactions completed across professional, industrial, healthcare, and IT focused staffing firms. These sectors of the HCM industry continued their record growth in Q1 2021, as Staffing transactions increased 24%, Outsourced Services transactions increased 114% and Software and Technology transactions increased 250% in the first quarter of 2021 from Q1 of last year. Part of these huge increases can be contributed to a slowdown of activity due to the pandemic in Q1 2020, but activity across all sectors is quickly heating up.
- North America remained the most active region in Q1 of 2021, with 70 total transactions representing 57% of global HCM transaction activity. EMEA also remained active with 33 total transactions representing 27% of global HCM transaction activity.