Recruitment & Resourcing Quarterly M&A Review Our Q2 2018 M&A Review summarises deals, valuations, and underlying M&A trends in the Recruitment & Resourcing sector covering contract, staffing, interim, permanent, executive search and online recruitment, recruitment process outsourcing (RPO), vendor managed services (VMS), and all recruitment support services and technologies. Key Highlights USA & Canada deal volumes by region fell by 18% in the quarter, the largest quarteronquarter movement for over a year. The proportion of deals by national buyers also continued its rise to reach a new peak of 95% of all deals. See pages 2 & 3 Large deals returned in the quarter following a recent absence. The acquisitions of Alexander Mann ( 820m) by OMERS Private Equity and Glassdoor ( 886m) by Recruit Holdings were the most notable deals. See pages 2 & 3 Report Authors Quoted valuation of Asia Pacific companies showed the largest aggregate value increase by region (6.8% up) driven by strong gains by the likes of Outsourcing Inc (20.1% up) and Recruit Holdings (26.5% up), both of which made sizeable acquisitions outside their region in the quarter. See page 4 Tim Evans Managing Director +44 (0)207 355 6272 twe@boxington.co.uk Satnaam Kaur Virdee Business Development Executive +44 (0)207 268 2265 skv@boxington.co.uk Disclaimer Boxington Corporate Finance 2018 The information contained in this document has been compiled by Boxington Corporate Finance Limited ( Boxington ) and includes material obtained from published sources that Boxington uses regularly but has not been verified. No reliance may be placed for any purposes whatsoever on the contents of this document or on its completeness. No representation or warranty, express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Boxington or by any of employees, agents or any other person as to the accuracy, completeness or correctness of the information contained in this document or any other oral information made available and any such liability is expressly disclaimed. The information contained in this documents should not be construed as an offer or solicitation to buy or sell any financials securities. This document and its contents may not be reproduced, redistributed, modified or passedon, directlyor indirectly, to any otherpersonor published, in whole or in part, forany purposeby its addressees without the prior writtenconsentof Boxington. 1
Quarterly M&A Review Selected transactions Q2 2018 2018 Buyer/Investor Acquisition Acquisition description June NES Global Talent Ltd Redbock LLC Specialist recruitment consultancy services for the pharmaceutical, biotechnology & medical device sectors Value ( m) June Consulting Solutions International, Inc. Meridian Staffing Services Permanent & contingent staffing services for the IT, commercial & federal sectors June Groupe Proman SAS Paramount Staffing Inc Permanent & temporary recruitment services for the industrial & logistics sectors June Bowmark Capital Lawyers On Demand Ltd Specialist temporary recruitment sevices for the legal sector June HR Go Plc AC Appointments June Akka Technologies PDS Tech Inc June TrueBlue Inc TMP Holdings Ltd May Summit Recruitment & Search Kama Kazi Africa May Essential Staffing New Start Personnel May Aus Bluefin Resources Group Kinetic Recruitment May Luba Groep BV Vallei Personeel May OMERS Private Equity AlexanderMann Solutions May Recruit Holdings Co., Ltd Glassdoor Inc Permanent, temporary & contract recruitment services across a broad range of sectors Placement of engineering & IT professionals to the aerospace, telecoms, infrastructure & energy sectors Provider of recruitment process outsourcing, resourcing & recruitment marketing services Recruitment services for the hospitality, real estate, technology & nongovernmental sectors Permanent & temporary recruitment services for the driving sector, with specialism in placement of HGV drivers Provider of multisector recruitment services & HR services including career management & transition Specialist permanent & temporary recruitment services for the construction, logistics & related sectors Talent acquisition & management, Executive Search & RPO services for clients across all major industries Online job board & job comparison platform, including employer reviews 820 886 May Sandri Walsh Limited Rosenberg Executive Search Limited Executive Search services specialist including interim & temporary executive & management placement May Hedera Group AB Addus Care AB April Little John & Co LLC Motion Recruitment Partners April CorTech International VForce Staffing Solutions April Careerlink Co,. Ltd Japan Business Service Co,. Ltd April Aus TMS Talent Aus InPlace Recruitment April AMN Healthcare Services Inc MedPartners April Beijing Career International Investigo April Outsourcing Inc Otto Holding BV Healthcare recruitment services, with specialisms in the placement of doctors & nurses Recruitment services for IT specialisms & provider of RPO services Specialist recruitment services for the industrial & clerical sectors Temporary & permanent recruitment services for administration sector, & BPO solutions Specialist recruitment services for the travel, tourism, Events & hospitality sectors Specialist recruitment services for the healthcare & medical sectors Contract & permanent recruitment services for BlueChip & SME corporations Surplus workforce recruitment from Central & Western Europe to shortages in The Netherlands & Germany 1 6 137 22 58 April ValuePlus NV Recruitment & Talent Management arms of Hudson Recruitment & talent management services across all major industry verticals 30 2
Deal value ( m) Quarterly M&A Review Selected transactions Q2 2018 Acquisitions by region Key: REGION % of total deals Change on prior quarter % deals by local buyers % deals by international buyers USA & CANADA 44% 95% 18% UK 5% 22% ASIA PACIFIC 21% 15% 38% 62% 89% 11% EMEA 13% 2% 40% 60% USA & Canada deal volumes fell by 18% in the quarter, the largest quarteronquarter movement for over a year. The proportion of deals by national buyers also continued its rise to reach a new peak of 95% of all deals in the region. Asia Pacific saw a surge of deals compared to prior quarter, up to represent 21% of all deals done globally. Australia and Japan were the two countries in the region that saw most activity, both from principally international crossborder trade buyers. Deal valuations % change on prior quarter Trade vs Private Equity % change on prior quarter 18% 22% 4% 200+ 51200 1150 <10m 18% 27% Private Equity Trade 78% 4% 37% Large deals returned in the quarter following a recent absence. The acquisitions of Alexander Mann ( 820m) by OMERS Private Equity and Glassdoor ( 886m) by Recruit Holdings were the most notable deals. There was relative stability in the mix of the nature of buyers, with trade buyers overwhelmingly continuing to dominate (78% of buyers) over Private Equity. 3
Quarterly M&A Review Quoted company valuations As at 30 June 2018 Last 12 months Valuation Multiples Change in share price GBP (millions) UK Stock Price (pence) Market Cap Enterprise Value (EV) Revenue EBITDA PE Ratio EV/EBITDA* % Hays Plc 186 2,710 2,670 5,081 212 15.2 10.9 0.5% Impellam Plc 445 226 302 2,171 45 5.3 0.4 21.1% Page Group Plc 561 1,840 1,750 1,372 118 17.5 12.7 6.5% Robert Walters Plc 710 529 498 1,166 42 15.0 10.7 1.1% Staffline Plc 936 262 278 958 27 8.0 7.0 4.6% SThree Plc 370 475 469 1,115 38 12.1 10.7 9.1% Average 535 1,007 995 1,977 80 12.2 8.7 0.05% United States Kelly Services, Inc. 1,785 666 663 4,100 63 9.3 8.5 12.2% KornFerry International 4,599 2,680 2,450 1,389 156 19.0 12.7 29.0% Manpower Group, Inc. 6,492 4,330 4,720 16,047 601 9.4 6.9 18.7% On Assignment Inc. 5,833 3,130 3,500 2,004 172 18.1 16.0 3.1% Robert Half International 4,921 6,150 5,930 4,019 394 18.5 13.1 23.4% TrueBlue, Inc. 2,047 776 809 1,914 60 11.7 8.6 13.3% Average 4,280 2,955 3,012 4,912 241 14.3 11.0 6.3% Europe Adecco Group AG 4,516 7,470 8,490 20,955 868 10.4 9.4 9.0% Brunel International NV 1,294 647 536 700 16 23.6 23.4 0.8% CPL Resources Plc 500 140 124 403 14 9.3 8.1 7.4% Groupe Crit SA 7,043 788 801 2,142 109 10.2 6.0 2.4% Randstad Holding NV 4,481 8,170 9,100 20,612 762 11.0 9.4 5.4% Synergie SE 3,805 896 894 2,057 103 10.8 8.0 14.5% Average 3,607 3,019 3,324 7,812 312 12.6 10.7 5.5% Asia Pacific and Rest of World EnJapan Inc. 3,843 1,760 1,580 280 63 28.5 20.9 2.8% Outsourcing Inc. 1,413 1,450 1,700 1,583 77 22.1 16.7 20.1% Pasona Group Inc. 1,239 459 552 1,928 30 51.0 7.0 16.7% Recruit Holdings 2,108 35,450 33,920 14,950 1,319 30.8 19.4 26.5% Average 2,151 9,780 9,438 4,685 372 33.1 16.0 6.8% Commentary * Requires discount when applied to private companies valuation Asia Pacific showed the largest aggregate value increase by region (6.8% up) driven by strong gains by the likes of Outsourcing Inc (20.1% up) and Recruit Holdings (26.5% up), both of which made sizeable acquisitions outside their region in the quarter. Europe was the weakest performer, down 5.5% against prior quarter end and with most players in the region falling between circa 5% and 15%. Where gains were booked (Group Crit and Brunel), these were negligible (0.8% to 2.4% only). Close behind Asia Pacific was the United States (6.3% up) with generally strong company performances across the board, particularly Korn Ferry (29.0% up) on account of higher than expected revenues and a wellreceived new single brand rebranding strategy. 4
About Boxington M&A specialists in the Human Capital sector We are an international M&A advisory boutique that specialises exclusively and uniquely in Human Capital sector of services and technologies that attract, supply, develop and manage talent and workforces. Our Recruitment & Resourcing sector coverage We cover all areas of the recruitment & resourcing sector including contract, staffing, interim, permanent, executive search and online recruitment, recruitment process outsourcing (RPO), vendor managed services (VMS), and all recruitment support services and technologies. Exit only advice We advise our clients on all aspects of their exit journeys from identifying their future exit options, to helping them prepare for exit, to delivering their ultimate exit. Team and global reach We are a team of sector specialist M&A advisors and researchers operating internationally across the US, UK, Europe, and AsiaPac from our offices in London, Tokyo andchicago. Selected recent deals Sale of talent assessment player to US strategic trade buyer Sale of Swiss IT and Pharma recruiter to US strategic trade buyer Sale of nuclear sector training and apprenticeship provider to UK strategic trade buyer Boxington Corporate Finance Limited www.boxington.co.uk London 52 Brook Street London W1K 5DS United Kingdon Tel: +44 (0)207 355 6270 Tokyo Taimei Aoyama Building 2611 Shibuya, Shibuyaku Tokyo 1500002 Japan Tel: +81 (0)90 6538 5037 Chicago 150 S Wacker Drive Chicago, IL 60606 United States Tel: +1 (312) 788 2620 5