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Human Capital M&A Market Review Q3 2018

13 December 2018

Gambit announces the publication of its Human Capital M&A Market Review for Q3 2018.

In summary:

  • Human Capital public interest company valuations declined in Q318 in line with the performance of global stock markets. In order to boost valuations and enhance earnings, listed acquirers continue to seek accretive acquisitions which will support strong valuation multiples for high quality assets.
     
  • The volume of global human capital transactions fell in Q318, however, European transaction volumes grew by over 25% signalling that confidence remains in the market which is encouraging given prevailing economic uncertainty across the region.
     
  • UK transaction volumes increased by over 50% in Q318, with an increased number of sellers taking advantage of favourable M&A conditions. The strength of recruitment fundamentals means that many acquirers are focusing on growing market share and expanding service offering.
     
  • Whilst Brexit negotiations are progressing, concerns and uncertainty remain with still no definitive clarity on what the UK’s future trading relationship with EU members will look like.
     
  • Unemployment remained at historic lows during Q318, which is applying pressure to the job market and as a result starting salaries are rising for both permanent and temporary staff, contributing to increasing fee income. This positive outlook should act as a catalyst for those looking to realise value and considering succession.
     
  • In the UK, the shortage of skilled and qualified candidates in certain sectors is a major and the use of temporary staff is likely to increase further.
     
  • The Gambit HC index shows that valuations for public interest companies dipped slightly in Q318. Whilst this was the fourth consecutive quarter in which valuations decreased, the fall was the smallest, suggesting stability is returning.

To read the full report click here.