RG Corporate Finance (RGCF) is reinforcing its position as a leading advisor to businesses in the recruitment sector, following a significant increase in mergers and acquisitions (M&A) throughout 2024.
Despite challenging economic conditions, the UK witnessed a 49% rise in recruitment business acquisitions and disposals in 2024, totalling 104 deals, according to data from BDO. While trade buyers dominated the market, private equity investors were also highly active, participating in 30 transactions, up from 24 in 2023.
International interest in UK-based recruitment businesses has surged, with overseas investments increasing by 78% in 2024 compared to the previous year. A total of 16 deals involved international buyers, up from nine in 2023, with significant participation from the United States, fuelled in part by the strength of the US dollar.
Certain sub-sectors within the recruitment industry have seen particularly strong M&A activity. Executive search firms experienced exponential growth, with more than three times the number of deals in 2024 compared to 2023. Meanwhile, engineering recruitment firms, especially those specialising in green energy and renewables, technology and education also attracted high levels of interest from both trade buyers and private equity firms.
However, alongside the increase in M&A activity, the recruitment industry has also faced significant challenges. The economic conditions in the UK throughout 2024 led to an average of 43 recruitment businesses declaring insolvency per month.
Among the businesses taking advantage of the increased M&A activity in the recruitment sector was Bluestones Investment Group, who successfully acquired Australasian Recruitment Company (ARC), a London-based business that specialises in placing candidates from Australia and New Zealand into UK roles, as well as Home Recruitment, its sister company in New Zealand, which is a transaction that RGCF advised on. The acquisition expands Bluestones’ international reach and strengthens its ability to connect talent across global markets.
Another business seeking to capitalise on M&A opportunities in the sector is Pangea Talent Solutions, a global energy and renewables recruitment business, which has engaged RGCF to support Pangea’s acquisition strategy as it looks to acquire businesses to enable the Group to expand into complementary industries such as nuclear energy and cleantech. The move is expected to enhance Pangea’s ability to meet increasing demand for highly skilled talent in the fast-growing renewable energy sector.
Further highlighting the strength of international investment in UK recruitment businesses, RGCF advised on the acquisition of Petroplan, a specialist energy sector recruitment business, by TXM Group. The deal allows TXM Group to extend its international footprint in energy recruitment and reinforces its position as a key supplier of talent across global markets.
RGCF continues to play a pivotal role in the recruitment sector, providing expert corporate finance advisory services to businesses seeking growth, investment, and strategic partnerships, whilst advising shareholders on the sale of businesses. With extensive experience in both UK and international recruitment transactions, RGCF remains committed to supporting the sector’s evolution and ensuring businesses are well-positioned to thrive in an increasingly competitive landscape.
Carl Swansbury, Partner and Head of Corporate Finance at RGCF, said: “The UK recruitment sector remains vibrant, with increased M&A activity driven by strategic UK based and overseas trade acquirers, both listed, privately-owned and PE backed, looking to acquire UK based businesses, and PE houses looking to acquire platform assets in the space. The transactions we have advised on of late underscore RGCF’s expertise and commitment to facilitating growth and diversification in this dynamic market. We anticipate that 2025 will bring further consolidation, as businesses look to scale, enter new markets and geographies, and drive efficiencies through strategic acquisitions.”
Carl added: “In this dynamic environment, it is crucial for businesses to maintain a strong focus on liquidity and implement robust cash flow forecasting to navigate financial challenges effectively. Shareholders and directors must be laser-focused not just on profitability, but also on maintaining financial resilience to withstand market pressures.”