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Human Capital Market Review Q3 2020

22 October 2020

Gambit Corporate Finance LLP announces the publication of its Human Capital Market Review for Q3 2020.

This edition examines the growing sense of confidence in the sector, where demonstrable Covid-19 resilience is driving robust levels of M&A activity.

To read the full report, please click here.

Q3 2020 Report Summary:

  • An encouraging level of optimism continues to exist around the Human Capital sector, with recent statistical forecasts highlighting that hiring activity could be back at ‘normal’ levels as early as January 2021, buoying the sector’s prospects.
  • Market confidence in the sector has risen on the back of its demonstrable Covid-19 resilience, with public company EV/EBITDA multiples in the Gambit Human Capital Index rising for the second consecutive quarter, increasing by 25% to pre-Covid-19 levels.
  • Sellers will be encouraged by the resilience shown in terms of improving EV/EBITDA multiples of companies in the Gambit Human Capital Index, which we expect will act as a catalyst for business owners to consider initiating a value realisation process in the near term.
  • The decision by the Treasury to cancel the Autumn Budget has delayed potentially significant changes to Capital Gains Tax into Spring 2021, providing renewed impetus for business owners that are considering an exit to expedite their plans in order to ensure optimal, tax efficient value realisation.
  • Q320 saw a continued rise in Online, Engineering and Education sub-sector transactions as a result of the fundamental shift towards increased digitisation, greater focus on infrastructure projects and the rising prominence of reskilling initiatives, driving respective deal volumes upwards, with high quality assets attracting premium valuations.
  • As the implementation of IR35 draws nearer, renewed concerns surrounding the technicalities of the regulations have arisen and companies affected need to ensure that the latest developments are understood to minimise impact on trading activity and maximise commercial opportunities as they arise.