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Human Capital M&A Market Review Q3 2019

14 November 2019

Gambit Corporate Finance announces the publication of its Human Capital M&A Market review for Q3 2019

Global M&A Activity Summary:

  • UK deal volumes increased by 37%, with growth stemming from sustained interest in sub-sectors such as General Staffing, Healthcare and IT, which have shown durability in the face of political and economic headwinds.
  • Despite the clear domestic focus of European deal activity, there is still some interest from corporates in continental Europe that are looking to expand into or bolster their presence in the UK. However, we are seeing a period of hesitation amid the Brexit impasse.
  • Cross-border activity in the Middle East & Asia region surged in Q319, mainly driven by activity in Japan where firms are increasingly using M&A as a tool for growth and expansion, encouraged by the economic and fiscal reforms introduced by Prime Minister Shinzo Abe.

Key Issues in Focus:

  • The effects of Brexit uncertainty on the recruitment sector are being compounded by the tightening labour market, wavering consumer confidence and slowing new contract momentum, all of which are affecting valuation multiples.
  • IR35 is at the forefront of discussions, with the Treasury pledging its commitment to the regulations taking effect in the private sector as planned, in April 2020. As a result, businesses are acting decisively and are taking advice on how to mitigate the effects, with some utilising M&A to reduce the administrative burden.
  • The number of UK permanent staff appointments fell for the seventh straight month in September, driven by subdued confidence, which has affected hiring decisions and the availability of workers.

To read the full report click here