Strategic M&A: What recruitment can learn from global deal trends

Written by: Paul Masters Managing Director, Sovereign Private

The global recruitment M&A market continues to provide valuable lessons for Australian firms, with recent transactions underscoring the importance of strategy, resilience, and positioning. While headline valuations can sometimes feel out of reach, the right combination of governance, management, and buyer alignment continues to unlock strong outcomes for vendors.

Lessons from Global Deals

In the United States, Kelly Services’ $425 million acquisition of Motion Recruitment Partners provided a textbook example of where large agencies are directing their focus to higher-margin businesses such as RPO and professional services.

This is consistent with the strategies of global giants like Randstad, Manpower, and Adecco, who are shifting away from volume plays toward margin-enhancing acquisitions.

For Australian agencies, this highlights the growing importance of specialising in areas where buyers see longterm profitability rather than just scale.

Healthcare staffing also remains a focal point, as demonstrated by the multibillion-dollar merger of AIA Healthcare and Cross Country Healthcare.

Backed by private equity, the deal is another signal of investor appetite for cyclically resilient sectors such as healthcare, education, and life sciences industries considered essential and less exposed to economic downturns.

Closer to home, Airswift’s acquisition of Energy Resourcing from Worley illustrates a different trend: corporates divesting recruitment arms deemed “noncore.” For agency owners, this points to future opportunities, as large corporates may continue to sell recruitment subsidiaries to release working capital.

What Valuations Really Mean

Strategic buyers are still paying upwards of 6.0x EBITDA for quality businesses, and in some cases more. The recent FourQuarters deal, a 70% perm business sold at 7.0x EBITDA, is a prime example.

One of the most debated topics across the industry remains valuations While “fair market value” assessments are useful for restructures or employee share plans, the numbers achieved in actual transactions often differ.

Strategic buyers are still paying upwards of 6.0x EBITDA for quality businesses, and in some cases more. The recent FourQuarters deal, a 70% perm business sold at 7.0x EBITDA, is a prime example.

Strong governance, a quality management team, and diverse clients allowed the vendor to achieve a premium outcome.

Importantly, the old bias toward contracting businesses is softening.

While contracting revenues are still viewed as resilient, premium multiples are also being paid for permanent placement firms when there is strategic alignment.

The message for owners is clear: it is less about whether you are perm or contractheavy, and more about whether you can demonstrate sustainable profitability and the right buyer fit.

International Interest in Australia

Japan and the UK remain the most active inbound investors. For Japanese firms, Australia represents a safe, wellregulated market close to home, offering meaningful penetration without the scale required for US entry.

UK businesses, meanwhile, see Australia as a familiar legal and cultural environment with growth potential. Both markets are expected to remain key sources of buyers in the next 24 months.

What’s Next?

Looking ahead, recruitment M&A will remain highly strategic. The era of mass consolidation has passed; buyers are now targeting deals that provide margin uplift, sector resilience, and strong strategic alignment.

For Australian recruitment owners, the opportunity lies in ensuring their business is “transaction ready”: robust governance, accurate forecasting, and a clear value proposition are critical to attracting the right buyer.

In today’s uncertain environment, one thing is certain: those who prepare and position themselves strategically will continue to capture strong outcomes, even in a choppy market.