In today’s staffing landscape, organic growth is only part of the equation. Many firms are pursuing a staffing M&A strategy to achieve scale, enter new markets, or unlock liquidity. At the most recent REACH: A Staffing Executive Masterclass held in California, Chad Gardiner of Bridgepoint Investment Banking and Martin Borosko of Becker LLC shared how staffing firm owners can position themselves for successful exits — or simply gain leverage by understanding their firm’s true worth.
Why Staffing Industry Mergers Are Gaining Momentum
Private equity firms and strategic buyers have ramped up interest in the staffing sector. As Chad explained, staffing industry mergers are driven by predictable revenue, scalable models, and niche specialization.
Firms that demonstrate consistency in EBITDA and operational strength are seen as acquisition-ready.
Understanding Staffing Firm Valuation
Your business may be worth more than you think — or less, if key areas are neglected.
Staffing firm valuation depends on several critical variables:
- Revenue consistency and quality of earnings
- Gross profit margins and client concentration
- Leadership depth beyond the founder
Chad noted that firms with recurring revenue, diversified client bases, and a solid management team often earn higher multiples.
Legal Due Diligence for Staffing Firms
Marty emphasized that legal due diligencefor staffing firms must start long before a deal is on the table.
Buyers want confidence. Red flags reduce deal value — or stop deals entirely. He advised firms to:
- Review all contracts for clarity and assignability
- Address misclassified workers and compliance risks
- Document back-office processes
A clean legal foundation makes a business easier to sell and quicker to close.
Achieving Financial Readiness for Acquisitions
Before selling a staffing business, the financials must be airtight. Chad recommended:
- Producing monthly financial statements
- Cleaning up bookkeeping and reporting practices
- Preparing for quality of earnings reviews
Financial readiness for acquisitions includes making sure margin reporting is accurate and transparent. Acquirers will scrutinize gross profit, bill/pay spreads, and client terms.
Avoiding Common Deal Killers
Deals fall apart for predictable reasons. Marty listed the most common:
- No clear ownership structure
- Unresolved employee liabilities
- Weak documentation on customer contracts
- Unprepared leadership transition plan
The earlier these issues are addressed, the smoother the deal process will be.
Selling a Staffing Business
Planning Ahead Pays Off
Even if you’re not planning on selling a staffing business soon, preparing as if you are will drive operational strength today.
To start, Chad and Marty suggest:
- Running an internal due diligence process
- Cleaning up contracts and corporate governance
- Building a leadership team that can run the business without you
This level of discipline increases value and gives you flexibility — whether your goal is to sell, merge, or simply scale with confidence.
Final Takeaways
- A smart staffing M&A strategy begins with long-term planning
- Legal and financial readiness increases your firm’s valuation
- Understanding staffing firm valuation can clarify future growth decisions
- Proactive action reduces risk and builds buyer confidence
Want expert support on your M&A journey? Reach out to Access Capital today. We help staffing firms strengthen their position and prepare for next-level growth.
💼 For deeper legal or financial insight, connect with the session speakers today!
- Chad Gardiner | cgardiner@bridgepointib.com
- Martin Borosko | mlborosko@becker.legal