More than half of the largest buy-out deals in the staffing sector will be private equity based in the foreseeable future, according to a lawyer who specialises in the sector.

Kevin Barrow, partner at Osborne Clarke, told Recruiter that the staffing sector was following the trend of the buy-out market overall.

Research published today by the Centre for Management Buy-out Research at Nottingham University reveals that in the year to September, 73% of all M&A activity by values, or £12.5bn, was private equity backed.

Barrow told Recruiter there were several reason why private equity was backing such a significant share of the staffing sector buy-out market:

- big recruiters have made the most of the acquisitions they want for now

- private equity sees sub-sectors, such as education, health, IT and perhaps engineering, as good value

- the owners of smaller listed companies, whose share prices have fallen, are looking for opportunities to offload their shares.

Barrow adds that some larger companies will continue to buy, and that smaller deals will be mainly trade buyers.

John Bissell, senior partner at business sales consultancy LBA, told Recruiter that in his experience “a good majority of deals in the staffing sector would be trade buyers. Most of the minority would be venture capitalists and financial institutions, but some private equity, but not a great deal”.