
2 minute read
Navigating the deal landscape: M&A insights from Sovereign Private
Written by: Paul Masters Managing Director, Sovereign Private
Australia’s staffing and recruitment sector continues to impress –with $46 billion in revenue recorded for 2023, it is now the second-largest market in the Asia-Pacific region, trailing only Japan. This puts Australia ahead of larger economies like China, and several Southeast Asian nations combined. Yet, despite the sector’s scale, recent years have brought significant fluctuations to the M&A environment.
Coming out of the pandemic, 2022 saw a boom in transactions. At Sovereign Private, we advised on four high-profile sales including Finite Group to Randstad and Launch Recruitment to Japanese acquirer Geechs.
This momentum, however, did not carry forward. By 2024 and into 2025, deal activity slowed sharply not because of a lack of buyers, but due to reduced agency performance, which has impacted valuations.
Many owners are unwilling to sell at today’s lower earnings and multiples, especially when reflecting on the high benchmarks set in by FY2022 financials.
Despite current caution among sellers, interest from buyers remains robust.
Japanese firms, particularly second-tier players outside the likes of Recruit and Persol, continue to see Australia as an ideal first step for international expansion – driven by strong governance, market size, and cultural affinity.
European interest, especially from the UK, is also returning after a hiatus sparked by geopolitical instability. To achieve a standout transaction in this environment, business owners must focus on three critical elements. First, identifying a strategic buyer – one who sees the acquisition as essential to their growth strategy –maximises valuation.
Second, businesses must be exit-ready: clean financials, compliance, and governance are nonnegotiable. Third, mitigating risk areas such as client concentration and weak management succession is vital.
As confidence begins to creep back into the market, we are seeing early signs of deal flow, particularly in cyclically resilient sectors like healthcare and life sciences.
A full recovery will depend on improved financial results, particularly in technology and white-collar sectors, where business confidence remains subdued.
At Sovereign Private, we remain deeply committed to helping agency owners navigate these complexities.
Through our new monthly APSCo Dealmakers podcast, we’ll continue sharing insights, case studies, and strategies to support successful outcomes in recruitment M&A.