Acquisition activity to intensify

Mon, 20 Jul 2009

A 10th of  recuitment firms in the UK could change hands due in this recession, according to a new study by financial analysts Plimsoll.
 
David Pattison, author of the new Plimsoll Industry Analysis – Recruitment Agencies, says: “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market.

“With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyers market out there for cash-rich companies.
 
“In the Plimsoll Industry Analysis we have identified 172 companies that have a sizeable cash reserve sat on their balance sheets that, due to record low interest rates, is generating nothing.

“One company has a £42m cash pot; a whopping 80% of turnover. These companies are now in the position to buy up large chunks of market share at rock bottom prices and make that money work for them. They must be like kids in a sweet shop at the moment – all those distressed competitors available at a fraction of their true value.
 
“The UK recruitment agencies’ market is still widely regarded as one of the UK’s most fragmented sectors. In our report we analysed 912 companies with a turnover of over £1m per annum and have picked out 105 that are primed to be taken over.

“Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market. Either way, the market is set for a wave of takeovers in the next months.”
 
Recruiter readers are entitled to a £50 discount of this new special edition of the Plimsoll Industry Analysis – Recruitment Agencies. Call 01642 626400 for further details and quote reference PR/SV30.