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 66% in Q3 of 2021 from last year, with 105 transactions completed. Deal activity continued the rapid pace in Q3 as many owners were looking to complete deals before the end of the year to avoid any tax changes that could be implemented in 2022. This along with active buyers, makes for an attractive seller’s market.
- Strategic buyers continued to dominate M&A activity in the sector, accounting for 90% of industry transactions vs. just 10% completed by private equity groups (financial buyers) throughout Q3 of 2021.
- Staffing-related transactions comprised the majority of HCM deals, with 47 transactions completed across professional, industrial, healthcare, and IT focused staffing firms. These sectors of the HCM industry continued their record growth in Q3 2021, as Staffing transactions increased 68% and Outsourced Services transactions increased 162% in the third quarter of 2021 from Q3 of last year. Software and Technology transactions, however, realized a 9% increase as the record growth of the past few quarters is returning to a normalized level.
- North America remained the most active region in Q3 of 2021, with 57 total transactions representing 54% of global HCM transaction activity. EMEA also remained active with 30 total transactions representing 29% of global HCM transaction activity.