The Big Three:
We continue to see owners of staffing companies make the same 3 major mistakes. Addressing these issues with your Advisor up front will help ease the pain during due diligence:
- Working Capital: If you use factoring, the Buyer is likely to treat cash as A/R and require it at closing. Sellers using factoring often think the cash belongs to them at closing
- Worker’s Comp: Whether you use Guaranteed Cost, Retrospective, or Self-Insurance, there are pros and cons of each. For example, Guaranteed Cost mitigates due diligence risk and will likely be a cost saving to the Buyer, but it is the most expensive and requires an experienced Banker to obtain credit for it in the EBITDA Adjustments
- Perm & Temp Valuation Expectations: Plain and simple, these are valued separately and anyone who says otherwise is probably not a good advisor for you.
Ping me for a confidential valuation overview or market consultation.
The Staffing Industry is a $180B part of the US economy with over 16,000 staffing firms providing labor to all sectors of our economic engine.
Transact Capital has specialized in the staffing industry since 2014 and has represented numerous staffing business owners across all staffing specializations, including IT, light industrial, clerical, technical (finance, engineering, etc.) and health care staffing and PEOs throughout the U.S. We are well connected in the staffing industry with a vast network of U.S. and international buyers as well as being members of SIA, ASA, NISA and numerous regional staffing organizations.
Our team, led by Patrick Morin, knows how to navigate the complexity of staffing transactions including ABL and MOD issues, negotiating working capital requirements, and contract transfers. Patrick speaks to staffing associations throughout North America including Massachusetts and New York Staffing Associations. He is regularly interviewed as an expert in the field. In addition to Patrick, colleagues Jim Sowers, Kevin Lilly and Ross Harris are active in the staffing industry as well as our entire team of associates and analysts. Almost 90% of our staffing deals have come from referrals.