According to an article written by Rod Hore, Director of HHMC Australia, there is an increased interest in M&A transactions in every level of the recruitment industry. He states that there are no doubts that this situation will continue to develop.

However, Hore says there are five key issues that small agencies need to take into account when considering a transaction in the current market.

• Size and corporate sophistication: larger companies are different to smaller companies. Their characteristics of this companies cannot be translated to smaller companies. Different sort of buyer and different valuation methods.
• Global vs Local: global companies tend to see small companies as a potential risk, so small companies should not really expect to be bought by a multinational company.
• Strategy: several deals are happening to prepare companies for changes in the market, as large companies want to keep up with new services and specialisations. Small companies often lack capacity of leading-edge.
• Timing: there are business cycles and even though the current cycle is positive for M&A transaction, it will not last forever.
• What if there are no buyers for your business? Every business owner must have a plan B.

To read the full article, click here.