Posted by Dave Phillips on May 15th, 2012 |
No Comments » As we all read the various news reports on the state of the US economy and the “sluggish” state of job growth, I often wonder why there isn’t more press on the positive impact staffing firms are having on employment.
Temporary employment penetration (temp as a percentage of the total workforce) is at its highest level since August 2007 at 1.88%! The last peak was in November of 2005 at 1.96%. In fact, some analysts and staffing industry insiders expect that rate to eventually surpass record levels above 2% as more employers choose flexible or project-based staffing in a choppy economic environment.
This is further evidence that staffing industry is hovering near the mid-point of a typical recovery cycle and perhaps without any major domestic or global hick-ups, we’ll have several good years of continued growth ahead of us.
As we near or hover around the mid-point of the cycle, many of our clients and friends in the industry are beginning to dust-off and update their strategic plans. We can help by providing current trends related to your business, thoughts on capital raises and potential transaction analysis. Have you updated yours?
BTW – If any of you are attending the CIETT Conference (International Confederation of Private Employment Agencies ) this month in London, please say hello to our teammate Alan Bugler, who will be attending.
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Posted by Jim Childs on May 3rd, 2012 |
No Comments » 2012 has been a very active year for M&A and much of the reason is the activity of private equity groups (“PEGs”) both as buyers/investors and as sellers. Many PEGs are looking to sell portfolio companies in 2012 due to the possibility of rising taxes and to assist them in the fund-raising process. Many funds had little/no activity in 2009-2010 so there is a backlog of funds wanting to raise their next fund and a successful exit is always helpful.
PEGs have also been very active as buyers/investors. We have seen valuations move up as the buyer demand has accelerated in 2011-2012. PEG demand for high growth firms and for those firms with recurring revenue dynamics has been particularly high. Last week we closed a capital raise for a very high growth consultancy focused on “Big Data.” Two very well-known financial institutions committed $50 million to this investment round.
Finally, we are seeing more interest from PEGs in making minority equity investments. Obviously expanding their investment parameters allows PEGs to deploy more capital. I also think that many PEGs now realize that there is a vibrant market for owners who want to maintain control yet still raise money. This structure makes the most sense for very high growth companies who want to invest in the future and also want the prestige factor that comes being associated with brand name investors.
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Posted by Alan Bugler on April 26th, 2012 |
No Comments » Alan presented at TechServe’s Large Firm Forum yesterday discussing recent merger and acquisition activity in the staffing sector as well as a detailed analysis of the recent On Assignment acquisition of Apex Systems.
On March 20, 2012, ASGN announced that it had entered into an agreement to acquire Apex for $600 million in cash and stock (9.2x TTM EBITDA).
The acquisition complements ASGN’s existing IT staffing platform, Oxford Global, which it acquired in 2007. Oxford focuses on high end IT workers that is places on urgent assignments at average bill rates of $116 per hour. Apex focuses on more traditional IT staffing skill sets with an average bill rate of $60 per hour.
On a pro forma basis ASGN will have generated $1.3 billion in revenue in 2011 with 30% gross profit margins.
The acquisition has been well received by the investment community with plans to close the transaction by July 12, 2012.
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