During Q1 there were hundreds of M&A deals and investment transactions. The most common segments included:
- Energy
- Marketing Technology
- Technology Communications
- Software & Information Services
- Business Services
While in 2014 growth forecast for most service businesses in the United States is progressing in the low single digits; last year the middle market experienced strong valuations (as measured as a multiple of EBITDA) during the year, even though M&A activity volume was suppressed. Across BPO outsourcing services middle-market purchase price multiples averaged approximately 8 times adjusted pro forma trailing EBITDA through 2013, which is above the 2012 level of 7 times. Valuations purchase price multiples have been possible with the wide availability of liquidity to finance leveraged buyout transactions. A graying ownership population, coupled with strategic buyers possessing capital available to finance acquisitions means today's owners have a choice between two paths. Decide to be a boutique and focus on maximizing the cash earnings over the next 3 to 7 years as a lifestyle small business or grow into a market sector leader. With banks continuously facing harsher regulatory environments, alternative debt and equity lenders have emerged for entrepreneurs as alternative to venture capital.
Notable private company M&A transactions YTD 2014 include:
TYPE | Acquirer | Company Acquired | Multiple | Details | ||
Private Staffing | Global Employment Solutions | TBD | Victory Park Capital divesture HQ in Littleton, CO with 16 offices in 11 states and includes Fahrenheit IT Staffing | |||
Private Tech | IQNavigator, Inc. | ProcureStaff Technologies, Ltd | NA | 2014 VMS Staffing divesture from VOLT Inc. | ||
Private BPO | SymphonyBPO | TBD | HQ in Malaysia with operations in Asia Pacific 1,000 employees | |||
Private RPO | HRx | TBD | 2014 RPO acquisition | |||
Private WFM | PetroSkills LLC | TBD | 2014 Training Acquisition | |||
Private BPO | Genyesys | Solariat | TBD |
| ||
Private Staffing | Hamilton-Ryker IT Solutions | TBD | January 2014 Staffing HQ Nashville, TN | |||
Private Staffing WFM Tech | Hamilton-Ryker IT Solutions | WMS iSymphony Inc. | TBD | January 2014 Staffing VMS SaaS Technology HQ Nashville, TN | ||
Private Tech | ThinkHR Corporation | HR That Works, Inc. | TBD | January 2014 HR Tech Software Acquisition | ||
Private BPO | Shumway, Ink., LLC |
| January 2014 BPO contact services acquisition | |||
Private Tech | PeopleAnswers[1] | ~>4X revenue and >12X EBITDA multiple? | January 2014 hr tech software acquisition | |||
Private BPO | Stream | January 2014 $820 million BPO acquisition Convergys also now has 125,000 employees working out of more than 150 locations in 31 countries, speaking 47 languages. | ||||
Private Staffing | Choose Rain Inc | Resolve Staffing Inc | TBD | January 2014 HRO Staffing Provides outsourced human resource services in the U.S. including temporary, temporary-to-hire and direct hire services | ||
Private BPO | Cordium Consulting Ltd | HedgeStart Partners LLP | TBD | January 2014 BPO Provides outsourced compliance, accounting, regulatory reporting, payroll, tax and related services | ||
Private Staffing | First Rate Staffing Corp | Loyalty Staffing Services, Inc. | February 2014 $1.5 million Staffing acquisition | |||
Private Tech | HireVue | Reschedge | TBD | February 2014 HR Tech Software WFM acquisition |
Related 2014 M&A deal transaction posts:
BAIRD 2014 M&A Middle Market Outlook & Analysis
Compliance Services Driving M&A In 2014
Healthcare Provider M&A Activity Drivers and Valuations
Tech M&A Update - March 2014
Previous private company M&A deal resources:
2013 Beyond Payroll HRO Services M&A Acquisition 2013 Recap
2013 BPO Contact Center M&A Deal Transactions
2012 HR software M&A transactions
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