human resources & staffing firms adapt to labor … · 2021. 4. 12. · yadgar, americas system...

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HUMAN RESOURCES & STAFFING FIRMS ADAPT TO LABOR MARKET SHIFTSHUMAN RESOURCES & STAFFING SERVICES INDUSTRY UPDATE | MARCH 2021

TABLE OF CONTENTS Key Industry Takeaways Industry Outlook Key Trends & Drivers M&A Overview Public Company Spotlight Notable Transactions Select Transactions Client Case Study Public Company Data Report Contributors Firm Track Record

KEY INDUSTRY TAKEAWAYS

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Sophea ChauManaging Director,Consumer & Retail

Jesse Betzner Vice President,Consumer & Retail

Capstone Headwaters’ Business Services Group is pleased to share its HumanResources (HR) & Staffing Services report. Through our ongoing conversationswith active industry players and analysis of trends during COVID-19, we haveidentified several key takeaways below, followed by an in-depth overview ofindustry dynamics on the following pages.

1. The U.S. labor market has demonstrated sequential improvement lending toincreased demand for staffing services providers in defensible end markets.

2. Rapid adoption of remote work has exacerbated the necessity of digitalsolutions in talent placement and recruiting.

3. Accelerated digitization heightened demand for HR & staffing servicesproviders specializing in information technology (IT) solutions.

4. Strategic buyers in the industry have acquired companies in noncyclical endmarkets to spur inorganic growth, accounting for 67.7% of deals announcedor completed in 2020.

5. Private equity (PE) add-on deal activity remained relatively robust accountingfor 23.7% of total deal volume in 2020, as PE-backed HR & staffing servicesproviders sought to bolster service offerings.

6. In 2021, Capstone expects M&A activity in the industry to continue toaccelerate in defensible end markets as companies resume hiring.

Bob BalabanHR & Staffing ServicesManaging [email protected]

Todd McMahonHR & Staffing ServicesHead of Investment [email protected]

Human Resources & Staffing ServicesHR & Staffing Firms Adapt to Labor Market Shifts

INDUSTRY OUTLOOK

Human Resources & Staffing Services | March 2021

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COVID-19 headwinds forced companies across all sectorsto reduce operating expenses through layoffs, furloughs,and hiring freezes, resulting in a record highunemployment rate of 14.7% in April 2020, according tothe Bureau of Labor Statistics (BLS).1 The labor market hasdemonstrated sequential improvement since April asnonessential businesses have reopened and resumedhiring. Despite early signs of economic recovery, theDecember unemployment rate remains elevated at 6.7%,nearly twice the pre-pandemic level in February of 3.5%,according to the BLS. Capstone believes that HR &staffing firms specializing in defensible end markets suchas Healthcare and IT will swiftly recover as companies innon-cyclical industries have the financial resources toresume hiring.

Amid a largely dislocated workforce, HR & staffing firmshave increasingly leveraged digital service offerings todrive efficiencies for job seekers and employers. Theaccelerated demand for technology-driven HR & staffingsolutions, across all sectors, has driven increasedinvestment among industry participants seeking to fostercompetitive advantages through technology. “The futureof work is taking shape today, and staffing firms have anopportunity to provide leadership and prioritize theirinnovation investments to drive future growth,” MichaelYadgar, Americas System Applications and Productsleader at Ernst & Young said in a news article.2 Notably,Randstad (ENXTAM:RAND) has created a digital andgrowth initiative to strengthen its global market leadershipand adapt to the remote work environment throughcontinued investment in digital solutions, according toquarterly results.3

Source: Capital IQ and Capstone Research

Public HR & Staffing Company EBITDA Multiples vs S&P 500

U.S.

Unem

ploym

ent R

ate,

Seas

onall

y Adju

sted

0%

5%

10%

15%

20%

U.S. Unemployment Rate2019 2020

0x

4x

8x

12x

16x

20x

Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21

Professional & Commercial Executive & Retained Search Healthcare S&P 500

EV/E

BITDA

March 11: WHO declares COVID-19 a pandemic

Congruent with positive labor market trends, publiccompany EBITDA multiples have surpassed pre-pandemiclevels in the Executive & Retained Search, up 115.4%through the last twelve months (LTM) and Professional &Commercial segments, up 73.1% through the LTM. Whilehealthcare staffing firms experienced a large increase indemand for travel nurses and respiratory therapistsbeginning in March, the sector’s recovery has beencurtailed by depressed demand in healthcare servicesunrelated to the treatment of COVID-19. For example, inQ3 AMN Healthcare (NYSE:AMN) posted a 4% decrease inyear-over-year (YOY) revenue in its Nurse and AlliedSolutions segment but recorded 12% growth in TravelNurse staffing, according to the company’s Q3 pressrelease.4 Despite subsegment discrepancies, Healthcarestaffing EBITDA multiples are up 4.2% through the LTM.

10.3x

14.8x17.2x

11.0x

Source: Bureau of Labor Statistics

Unemployment hit a record high of 14.7% in April

KEY TRENDS & DRIVERSDigitization in Recruiting: Restrictions following theCOVID-19 outbreak have forced companies to resumeoperations remotely, exacerbating the necessity oftechnology and accelerating investment in digitalsolutions. Companies spent the equivalent of ~$15 billionextra per week on technology to improve safety andsecurity for employees working remotely during thepandemic, according to a Harvey Nash and KPMGsurvey.5 Many HR & staffing services providers haveadapted to remote recruiting by automating the talentacquisition and hiring process to benefit the needs ofemployers and clients. Additionally, HR & staffingservices providers have utilized mergers and acquisitions(M&A) to bolster digital staffing solutions in order todifferentiate their platforms and service offerings in anindustry that has become increasingly dependent ontechnology. This is exemplified by recent deals, includingThe Caldwell Partners acquisition of IQTalent Partners, atalent acquisition and recruitment firm (December 2020,$11.1 Million), and BestatDigital’s acquisition of SabaSoftware, a cloud-based intelligent talent managementsolutions provider (October 2020, Undisclosed).

Defensibility in IT: In November, the number of ITjobs in the U.S. rose for the fourth consecutive monthreaching 5.2 million, according to TechServe Alliance.6The rapid adoption of technology necessitated by alarge portion of the workforce shifting to remote workhas driven demand for IT professionals. In theirrespective Q3 earnings calls, Adecco (SWX:ADEN), KellyServices (NAS:KELY.A), and Randstad reported thattheir IT businesses have been particularly resilientamid the pandemic compared to other segments. HR& staffing services firms are expected to continueinvesting in the growth of their IT talent placementbusiness in 2021.

Reemergence of Temporary Staffing: In April 2020,U.S. temporary labor experienced employment losses thatwere approximately double those of the broader labormarket, reaching a ten-year low of two million temporaryand contract employees, according to McKinsey.7However, Capstone believes that looming economicuncertainty will make companies less inclined to engagein permanent hiring, resulting in the recovery of thetemporary labor market. The flexibility that temporarylabor entails will allow companies to foster their recoverywithout committing to permanent hires. Additionally,companies can recruit permanent employees from theirpool of temps based on performance. As businessescontinue to grapple with financial uncertainty, temporarylabor providers are poised to capture elevated demand.

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Job-Retention in the Public Sector: In response tothe COVID-19 pandemic, officials furloughed workersin the public sector driving employment to its lowestlevels since 2001, according to PEW Charitable Trusts.8Employment in the public sector is typically moreresilient than the private sector during economicdownturns. Of the government workers represented,93% of those that were laid off reported that their jobloss was temporary in the Federal Government’sCurrent Population Survey for May.9 Due to higherjob-retention in the public sector, Capstone anticipatesincreased demand for HR & staffing services providersspecializing in government placement in 2021.

Bifurcation in Healthcare Staffing: Surges in COVID-19 cases have heightened demand for travel nurses,respiratory therapists, and intensive care unit(ICU) staffing, as hospitals have struggled to fillpositions in these segments, according to Capstone’sJanuary Healthcare Staffing Report. With the demandfor clinical healthcare workers outpacing supply,healthcare staffing firms have played a crucial role inscaling healthcare workforces. While clinicalhealthcare workers have experienced increased hoursand bill rates, physical and occupational therapistshave endured revenue declines as hospitals havepostponed elective procedures in order to have thecapacity to focus on the treatment of COVID-19,according to Healthcare Dive.10

Key Performance Indicators

Acquiring New Business: Companies have acquired businesses in defensible end markets to bolster growth amid the pandemic.

Investing in Technology: HR & staffing firms have improved digital solutions to attract recruiters and job-seekers.

Restructuring Marketing: Companies have invested in digital marketing to establish a presence in the online-recruiting space.

Source: Capital IQ, Company Press Releases, and Capstone Research


M&A OVERVIEW

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In Q4 2020, M&A activity in the HR & Staffing Servicesindustry experienced a mild resurgence, outpacing Q3transaction volume by 26.5%. However, deal volume isdown substantially YOY with 163 deals announced orcompleted in 2020, compared to 274 transactions in2019. Due to low barriers to entry, the Staffing industryhas historically been highly fragmented across segments.However, amid the economic downturn, companies areconsolidating in defensible end markets to foster growth,as evidenced by Premier Health’s $11.4 million acquisitionof healthcare staffing company, Code Bleu, in November.By combining operations, Premier Health has become amarket leader with the capacity to increase the value of itshealthcare systems through technological innovation.

While transaction volume remains significantly lower YOY,quality HR & staffing services providers that havedemonstrated robust performance amid the pandemiccontinue to garner heightened buyer interest. Privatestrategic transactions accounted for 48% of total dealactivity in Q4 as companies consolidated competitors tospur growth inorganically. Despite uncertainty in thelabor market and low debt availability, private equity firmsmaking platform acquisitions accounted for 8.7% of 2020volume, compared to 7% in 2019. PE add-on deal activityalso remained relatively robust, accounting for 23.7% of2020 transactions compared to 30.3% in 2019. ThroughM&A, PE-backed HR & staffing services providers soughtto bolster geographic reach, service offerings, and endmarket exposure with tuck-in deals.

19.7%

48.0%

8.7%

23.7%STRATEGICPublicPrivate

FINANCIALPlatformAdd-on

M&A Volume Shows Improvement in Q4

Year-To-Date Buyer Breakdown

Note: Year-to-date ended December 31, 2020Source: Capital IQ, PitchBook, FactSet, and Capstone Research

53 6375 83

46 40 3443

0

30

60

90

120

Q1 Q2 Q3 Q4

2019 2020

Numb

er o

f Tran

sacti

ons

5

While transaction volume remains lower year-over-year, Q4 deal activity has demonstrated sequential improvement

supporting a more favorable outlook for 2021.

Todd McMahon, Head of Investment Banking“While 2020 certainly had its challenges, we saw a significant uptick in Q4 which bodes well for thesector going into 2021 and beyond.”

Bob Balaban, Managing Director“Despite depressed transaction volume in 2020, labor market improvements and continuedconsolidation in Q4 support a favorable M&A outlook in 2021.”


Company Description and Acquisition Strategy

HIRE Technologies (TSXV:HIRE) is a HR services provider based in Toronto, Canada that offers temporary and permanentplacement services through its subsidiaries. The company acquires IT, staffing, and HR consulting firms in order to fostergrowth, bolster service offerings, and expand its geographic footprint. With diverse revenue streams through its subsidiariesand a technology-driven approach to human resources, HIRE’s business model is designed to be responsive to varyingeconomic conditions.

In 2020 HIRE acquired The Headhunters Recruitment, Kavin Group, and Taylor Ryan, increasing its in-house employees by50%, according to its January press release.11 The company also entered a definitive agreement to form a partnership withAtlas ID, a software solutions provider that connects employers with COVID-19 tests. To fund its 2020 acquisitions, HIREused proceeds from two rounds of private placement financing in Q3 and Q4, totaling $6.5 million. HIRE’s aggressiveacquisition strategy fostered a 311% increase in job placements in Q4 2020 from Q4 2019. HIRE indicated that it plans toremain acquisitive in 2021 to bolster its national footprint in Canada and enhance its technological capabilities, with SaaS-based offerings serving as a strong investment focus. In addition, HIRE has explored U.S. target companies to expand itsgeographic presence, according to its January press release.

"Over the last two quarters, we have been working exceptionally hard to grow the Company's revenue and increase ourgeographic reach. Since the start of 2020, we have attained an upward trajectory for our share price and raising our marketcap from $8M to approximately $40M, creating value for our shareholders all during the worst pandemic in a century," saidSimon Dealy, CEO of HIRE Technologies, according to the press release.

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Ticker: (TSXV:HIRE)Headquarters: Toronto, CanadaLTM Revenue: $8.6 million (September 2020)Market Capitalization: $31.5 million (January 2021)

PUBLIC COMPANY SPOTLIGHT

Announce Date Target Company Description / Investment Rationale

12/18/20HIRE acquired Taylor Ryan Inc. in December for an enterprise value of $3.2 million, adding $1.0 million of EBITDA. Taylor Ryan offers executive search, contingency recruitment, and HR consulting services. Through the transaction HIRE gains exposure to Taylor Ryan’s connections to brands in real estate and construction.

11/24/20In December, HIRE acquired Kavin Group, closing a $4 million private placement. The Kavin Group provides staffing services to industrial and healthcare markets in Canada. The acquisition expands HIRE’s geographic footprint and bolsters its service offerings in general labour and healthcare.

09/30/20HIRE entered a definitive agreement to form a partnership with Atlas ID in September. Atlas provides a software platform that provides employers with a solution for implementing employee testing for COVID-19 empowering staffing, IT, and HR consulting firms to reopen safely amid the pandemic.

09/02/20In September, HIRE acquired the Headhunters Recruitment Inc. for an undisclosed sum. The Headhunters is a leading recruitment company in Canada that serves a wide range of industries. Through the acquisition, HIRE has added key leadership, formed synergies, and increased stakeholder value.

2020 Acquisitions and Partnerships

Source: Capital IQ, Company Press Releases, and Capstone Research


NOTABLE TRANSACTIONS

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Acquires

A buyout fund management by Goldman Sachs (NYSE:GS) Merchant Banking Division has acquiredhuman resource consulting services provider People Corporation for an enterprise value of $990.5million.

Since 2019, People Corporation has completed nine acquisitions, using strategic deals to bolstergrowth. In 2020, the company’s annual revenue increased by 30% YOY to $165 Million, yet only 9% ofthat total growth figure was organic, according to Nasdaq.12 Through its deal with Goldman Sachs,People Corporation will have the financial resources to continue to invest in compelling opportunitiesthat further increase the company’s scale in talent and technology.

“The company has a compelling client offering with experienced consultants and a national scale thathave helped deliver outstanding growth over time. There is also a continued and meaningfulinvestment opportunity to deploy capital and access opportunities in People Corporation’s core andadjacent markets,” said Anthony Arnold, Managing Director at Goldman Sachs.13

Goldman Sachs Merchant Banking Division acquires People Corporation (December 2020, $990.46 Million)

Kelly Services, Inc. acquires Greenwood/Asher & Associates, Inc. (November 2020, Undisclosed)

The Caldwell Partners International, Ltd. acquires IQTalent Partners(December 2020, $11.14 Million)

Several notable transactions have been announced or completed in the industry in 2020. Select transactions are outlined below, followed by a more comprehensive list on the following page.

Acquires

Kelly Services (NASDAQ:KELY.A), a global workforce solutions company, acquired Greenwood/Asher &Associates, an executive search and recruitment firm specializing in higher education job placement.The terms of the transaction were not disclosed.

The completion of this transaction expands Kelly’s offerings beyond K-12 and into the higher educationspace. While the pandemic has created unprecedented challenges for executive search firms, demandhas increased for experienced education professionals, according to Kelly. Greenwood/Asher &Associates will leverage Kelly’s global talent network in order to identify, develop, and place top talent.

“Across the education landscape, the need for talent has never been greater, and Kelly has beendiligently identifying adjacencies and growth opportunities to meet the increased demand forexperienced education professionals,” said Peter Quigly, President and CEO of Kelly Services.14

Canada-based executive search firm Caldwell Partners has acquired IQTalent Partners, a talentacquisition and recruitment firm, for an enterprise value of $11.1 Million. IQTalent Partners uses atechnology-enabled on-demand recruitment platform to connect companies and candidates. Over thepast six years IQTalent Partners has experienced significant growth, with a compound annual growthrate of 45% per year. Additionally, the company has partnered with more than 300 corporations acrossa wide range of industries and geographies, according to a press release.15

Founded in 1970, Caldwell has a 50-year history of providing executive talent trough transformativesearches at the highest levels of management and operations. This acquisition combines IQTalent’sinnovative use of technology and unique service model with Caldwell’s breadth of experience and vastnetwork, driving shareholder value and future growth potential.

Acquires


Enterprise EV / LTMDate Target Acquirer Target Business Description Value (mm) Revenue EBITDA

12/31/20 Edgewater Technical Associates

Alaris Equity Partners USA Offers engineering staffing services. - - -

12/22/20 OneWire Recruiter.com Group

Operates as a recruiting and sourcing platform that provides career management services. - - -

12/22/20 IQTalent Partners The Caldwell Partners Operates as a recruitment agency. $11.1 - -

12/18/20 Taylor Ryan Hire Technologies (TSXV:HIRE)

Engages in executive search, contingency recruitment, and HR consulting services. $3.2 - -

12/18/20 Avitus Group Vensure Provides co-employer and business services worldwide. - - -

12/18/20 MatrixOneSource Vensure Provides BPO services in the areas of human resources and payroll processing. - - -

12/18/20 Surge Resources Vensure Offers employee leasing and human resources services. - - -

12/14/20 People (TSXV:PEO)

Goldman Sachs (NYSE:GS) Delivers human resources consulting services. $990.5 5.7x 20.2x

12/03/20 Meritek Astek Canada Recruits contractual and permanent resources in information technology. - - -

12/01/20 GeoSearch ERIS Information Operates as a personnel recruitment firm. $8.2 - -

11/30/20 ENCOMPASS People Corp. (TSXV:PEO) Operates as a human resource consultancy firm. - - -

11/24/20 Kavin Group Hire Technologies (TSXV:HIRE)

Provides talent management and recruiting services. - - -

11/23/20 BenefitWorks Fulton Bank (NAS:FULT)

Provides employee benefits consulting and administration services. - - -

11/23/20 Hired Vettery Operates a marketplace that enables tech companies to recruit. - - -

11/13/20 Interactive Business Systems The Planet Group Provides technology solutions and staffing services.. - - -

11/05/20 Optimum Talent Arthur J. Gallagher & Co. (NYSE:AJG) Operates as an integrated talent management firm. - - -

10/21/20 Latitude 36 Harvey Nash Provides staffing solutions. - - -

10/20/20 TalentBeacon Mission Mining

Provider of consulting services for global talent acquisition. - - -

10/06/20 VENIRé Vaco Operates as a recruitment and technology consulting company. - - -

10/05/20 Extreme Staffing Ascend Staffing Operates as a temporary staffing company. - - -

10/02/20 Saba Software BestAtDigital Provides cloud-based intelligent talent management solution. - - -

10/01/20 CoitGroup Hudson Global (NAS:HSON) Provides talent solutions. $9.4 - -

Note: highlighted deals are Capstone’s transactionsSource: Capital IQ, PitchBook, FactSet, and Capstone Research

SELECT TRANSACTIONS

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Engineering Staffing Firm Recapitalized by Alaris Equity Partners-February 2021Capstone Headwaters represented the shareholders of Edgewater TechnicalAssociates (“Edgewater” or the “Company”) in its recapitalization transactionwith Alaris Equity Partners USA, Inc.. Capstone Headwaters was engaged by the shareholders of Edgewater, an

engineering staffing services provider, to assist in the sale of the company toa strategic or financial buyer.

Founded in 2003 and employing over 400 highly skilledprofessionals, Edgewater is a professional and technical services firm thatsupports the U.S. Department of Energy; organizations involved in thecommercial nuclear industry in the U.S., UK, and Canada; and other privatesector business involved in other high-hazard or complex operations. TheCompany provides subject matter expertise and staff augmentation supportin specialty areas such as nuclear operations, nuclear safety basis,multidisciplinary engineering, regulatory compliance, waste management,and environmental remediation. Edgewater has five offices, with corporateheadquarters in Los Alamos NM, and regional offices in Carlsbad NM, OakRidge TN, Aiken SC, and Hanford, WA.

Throughout Alaris’ 16-year history, their preferred MBO solution has provento create full liquidity events for the exiting majority shareholders whilesimultaneously providing an attractive option for high quality managementteams to become majority owners of their company. With an evergreencapital base, Alaris’ the balance sheet is positioned to provide access of upto $200 million of capital on an ongoing basis.

Bob Balaban, Managing Director at Capstone and lead on this transaction,added, “It was a privilege for us to represent such outstanding engineeringservices firm. The management team at Edgewater has worked tirelessly togrow the business into the market leader that it is today, and we are thrilledto have been a part of reaching the next step in their journey.”

CLIENT CASE STUDY: EDGEWATER TECHNICAL ASSOCIATES

has been recapitalized by

“

”

This transaction enabled us to realize the value in the decades of hard work that have gone into building our business, and we are excited to pass the torch on to the next generation of leaders, in partnership with Alaris Equity Partners. The team at Capstone helped us anticipate and navigate the many issues that arise during a process like this, and we could not have reached the incredible outcome that we did without their guidance.

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- Michael Kirkpatrick, Founder of Edgewater Technical Associates


PUBLIC COMPANY TRADING & OPERATING DATA: PROFESSIONAL & COMMERCIAL

Source: Capital IQ as of February 26, 2021

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Price % 52 Wk Market Enterprise LTM EV / LTMCompany 02/26/21 High Cap Value Revenue EBITDA Margin Revenue EBITDAHeidrick & Struggles International $35.89 93.4% $694.8 $474.1 $621.6 $86.8 14.0% 0.8x 5.5xKorn Ferry $61.55 94.2% $3,323.5 $3,193.5 $1,695.4 $268.5 15.8% 1.9x 11.9x

Mean 14.9% 1.3x 8.7xMedian 14.9% 1.3x 8.7xHarmonic Mean 14.8% 1.1x 7.5x

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 02/26/21 High Cap Value Revenue EBITDA Margin Revenue EBITDAAdecco Group AG $62.83 93.3% $10,184.4 $11,154.1 $23,927.8 $1,140.1 4.8% 0.5x 9.8xASGN Incorporated $92.97 92.1% $4,918.1 $5,677.1 $3,950.6 $397.9 10.1% 1.4x 14.3xKelly Services, Inc. $20.82 90.5% $817.9 $686.9 $4,516.0 $106.8 2.4% 0.2x 6.4xKforce Inc. $51.35 97.0% $1,075.8 $1,094.6 $1,397.7 $91.7 6.6% 0.8x 11.9xManpowerGroup Inc. $94.44 95.0% $5,193.7 $5,187.5 $18,001.0 $616.7 3.4% 0.3x 8.4xRandstad N.V. $66.96 96.1% $12,317.0 $12,996.4 $25,343.1 $1,012.8 4.0% 0.5x 12.8xResources Connection, Inc. $12.76 95.4% $414.8 $423.0 $647.2 $39.5 6.1% 0.7x 10.7xRobert Half International Inc. $77.79 93.2% $8,663.3 $8,391.6 $5,109.0 $408.9 8.0% 1.6x 20.5xTrueBlue, Inc. $20.83 93.7% $739.2 $745.4 $1,846.4 $32.6 1.8% 0.4x 22.8x


EV = enterprise value; LTM = last twelve months$ in millions, except per share data

PUBLIC COMPANY TRADING & OPERATING DATA: HEALTHCARE

PUBLIC COMPANY TRADING & OPERATING DATA: EXECUTIVE & RETAINED SEARCH

EV = enterprise value; LTM = last twelve months$ in millions, except per share data

Price % 52 Wk Market Enterprise LTM EV / LTMCompany 02/26/21 High Cap Value Revenue EBITDA Margin Revenue EBITDAAMN Healthcare Services, Inc. $72.87 81.7% $3,438.0 $4,364.3 $2,393.7 $291.2 12.2% 1.8x 15.0xCross Country Healthcare, Inc. $11.11 82.8% $416.8 $493.7 $836.4 $37.9 4.5% 0.6x 13.0x



HUMAN RESOURCES & STAFFING SERVICES REPORT CONTRIBUTORS

Lucas LaCroceResearch [email protected] | 617-619-3331

Luke serves as a Research Analyst at Capstone Headwaters primarily focusing on the Industrials andBusiness Services industries. Before joining the firm’s corporate Research Team, Luke was an intern atDLG Wealth Management, Valpey Financial Services, and VIGILANT Capital Management where heperformed financial analysis on equities, evaluated exchange traded funds and mutual funds, anddetermined the impact of proposed legislation on financial planning strategies. Luke earned a BA inEconomics and English from Union College.

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Bob BalabanManaging [email protected] | 303-792-9400

Bob Balaban joined Capstone Headwaters in 2011 and brings over 25 years of investment banking andoperating experience. Bob has served as the lead banker on over 75 merger and acquisition transactionsprimarily in the business services marketplace. He has also been involved with over a dozen startupcompanies, including Great Plains Accounting Software, Inc., a software company that was ultimatelyacquired by Microsoft Corp. as well as InaCom Corp., a distribution company that he helped grow toseveral billion dollars in annual revenue before it was acquired by Hewlett Packard. He has appeared innumerous national business publications, including the Wall Street Journal and Fortune Magazine and onnational television as an expert in mergers and acquisitions.

2020US MIDDLE MARKET INVESTMENT BANK

OF THE YEAR

TURNAROUND AWARDS

2019

INVESTMENT BANKING FIRM OF THE YEAR

INTERNATIONAL AWARDS

2019


2020


2020

MIDDLE MARKETINVESTMENT BANK

OF THE YEAR

Todd McMahonHead of Investment [email protected] | 617-619-3334

Todd McMahon possesses over 20 years of transaction, financial services and corporate executiveexperience. Prior to Capstone Headwaters, Todd was President of Array Financial Services, a Bostonbased boutique M&A advisory firm he founded in 2002. He began his career at Putnam Investments,later moving to Bank Boston’s investment banking group. Later, Todd served as Managing Director atRoss Crossland Weston/RCW Mirus, where he was responsible for managing the firm’s technologyinvestment banking practice. Todd’s investment banking experience is complemented by hisinvolvement as an entrepreneur and investor where he was involved in various consolidationtransactions, raised over $30mm of debt and equity financing and was responsible for managing allaspects of operations. He earned his MBA from Boston University and his BA from the University ofMassachusetts.


FIRM TRACK RECORD

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has been acquired by has been acquired by

has been acquired by has been acquired by has been acquired by has been acquired by

has been acquired by has been acquired by

has been acquired by


CERTIFIED IT & ITRICITY

FREEDOM DATA

has acquired

ARIES GROUP INC.

valuation and financial advisory


NORTHERNHEALTHCARE CAPITAL

debt financing

has recapitalized with



A PRIVATEINVESTMENT GROUP

PROVIDER OF STAFFING AND HUMAN RESOURCES

SERVICES TO THE FASHION INDUSTRY

CONFIDENTIAL

corporate sale (IN PROCESS)

has been acquired byhave been acquired by

has been recapitalized by has been acquired by


has partnered with has partnered with


CITATIONS

1. U.S. Bureau of Labor Statistics, “Employment Situation Summary,” https://www.bls.gov/news.release/empsit.nr0.htm, accessed January 27, 2021.2. SAP, “EY and SAP Identify and Address Disruptive Trends in the Staffing Industry,” https://news.sap.com/2020/11/ey-and-sap-identify-and-address-

disruptive-trends-in-the-staffing-industry/, accessed January 27, 2021.3. Randstad, “quarterly results Q3 2020,” https://www.randstad.com/investor-relations/results-and-reports/quarterly-results/, accessed February 2,

2021.4. Alpha-Sense, “Q3 2020 AMN Healthcare Services Inc Earnings Call,” https://research.alpha-sense.com/, accessed January 27, 2021.5. Harvey Nash KPMG, “CIO Survey 2020,” https://www.hnkpmgciosurvey.com/, accessed January 27, 2021.6. Staffing Industry Analysts, “IT Jobs up 0.5 in November but Remain Down Over Year: Techserve Alliance,”

https://www2.staffingindustry.com/Editorial/IT-Staffing-Report/Jan.-7-2021/IT-jobs-up-0.5-in-November-but-remain-down-over-year-TechServe-Alliance, accessed January 27, 2021.

7. McKinsey & Company, “Taking a fresh look at temporary labor sourcing amid uncertainty,” https://www.mckinsey.com/business-functions/operations/our-insights/taking-a-fresh-look-at-temporary-labor-sourcing-amid-uncertainty, accessed January 27, 2021.

8. The PEW Charitable Trusts, “How COVID-19 is Driving Big Job Losses in State and Local Government,” https://www.pewtrusts.org/en/research-and-analysis/articles/2020/06/16/how-covid-19-is-driving-big-job-losses-in-state-and-local-government,accessed January 27, 2021.

9. United State Census Bureau, “Current Population Survey (CPS),” https://www.census.gov/programs-surveys/cps.html, accessed January 27, 2021.10. HEALTHCAREDIVE, “Hospitals across US cancel elective procedures – again,” https://www.healthcaredive.com/news/hospitals-cancel-elective-

procedures-once-again/589202/, accessed January 27, 2021.11. HIRE Technologies, “HIRE Technologies Provides Corporate Update and Plans for 2021,” https://hire.company/hire-technologies-provides-corporate-

update-and-plans-for-2021/, accessed January 27, 2021.12. Nasdaq, “Goldman (GS Arm Signs All-Cash Deal to Buy People Corporation,” https://www.nasdaq.com/articles/goldman-gs-arm-signs-all-cash-deal-

to-buy-people-corporation-2020-12-16, Accessed January 27, 2020.13. GlobalNewsWire, “People Corporation to be Acquired by Goldman Sachs Merchant Banking,” https://www.globenewswire.com/news-

release/2020/12/14/2144438/0/en/People-Corporation-to-be-Acquired-by-Goldman-Sachs-Merchant-Banking.html, accessed January 27, 2021.14. GlobalNewsWire, “Kelly Acquires Specialty Education Executive Search Firm, Greenwood/Asher & Associates,” https://www.globenewswire.com/news-

release/2020/11/23/2131937/0/en/Kelly-Acquires-Specialty-Education-Executive-Search-Firm-Greenwood-Asher-Associates.html, accessed January 27, 2021.

15. Cision, “Caldwell Acquires IQTalent Partners, Inc.,” https://www.newswire.ca/news-releases/caldwell-acquires-iqtalent-partners-inc--895831912.html#:~:text=The%20Caldwell%20Partners%20International%20Inc.&text=TORONTO%2C%20Dec.,announced%20on%20December%2022%2C%202020, accessed January 27, 2021.

Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission ofany reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security ofany such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for thegeneral information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation orneeds of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for allinvestors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be reliedupon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to varymaterially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subjectto change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. Thisreport may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information containedherein should not be construed as legal advice.

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Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. Thefirm has a rich, 20-year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors,and creditors. Capstone offers a fully integrated suite of corporate finance services, including M&A, debt and equityplacement, corporate restructuring, valuation and fairness opinions, financial advisory, and ESOP advisory services.

Headquartered in Boston, the firm has 175+ professionals across 17 offices in the U.S., with an international presenceincluding over 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertisethrough large, cross-functional teams on a global basis.

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human resources & staffing firms adapt to labor … · 2021. 4. 12. · yadgar, americas system...

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