What We’ve Been Reading

Our Outlook on 2019

Managing Director Derek Lewis reports strong investor interest in workforce solutions as companies embrace outsourcing and grapple with hiring challenges. As 2019 unfolds, Lewis is closely watching core metrics such as EBITDA and revenue growth across business services companies. He is also tracking the impacts of artificial intelligence and robotic process automation on a variety of business processes, as well as the challenges presented by hiring and retaining talent.

Looking ahead, Lewis emphasizes the importance of “sticky” customer relationships, citing their power to help companies weather uncertain economic conditions. Read on for his full comments on the outlook for business services in 2019. Read more here.

Growth in Skilled Trades Staffing

Revenue appears to be growing for staffing firms providing skilled trades workers, according to several indicators, including our recent US Skilled Trades Staffing Survey. Read more here.

Paychex Completes Acquisition of Oasis Outsourcing

Paychex, Inc., has completed the acquisition of Oasis Outsourcing Acquisition Corporation, the nation’s largest privately owned professional employer organization (PEO) and an industry leader in providing human resources outsourcing services. Read more here.

What Talent Acquisition Leaders are Expecting from the 2019 Job Market

As 2018 comes to a close, we’re able to look back on the job market this year and observe a remarkably strong year for businesses and workers. Read more here.

Kelly Services – Legal Divestiture

Trustpoint.One, a premier eDiscovery and legal solutions provider in the U.S., today announced the acquisition of Kelly Legal Managed Services (KLMS), formerly known as "Kelly Law Registry," making this the third in a series of Trustpoint acquisitions during Q4 of 2018, including Alderson Court Reporting and Confluent Translations. Read more here.

What We’ve Been Hearing

Excerpts from Recent Earnings Calls

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“He’s [Tim Crowhurst, Head of Corporate Development] been building our capabilities from three perspective(s). One on the sourcing of deals, second, in terms of due-diligence and the third, integration of deals, and he is working closely with all of our businesses to define areas where it makes strategic sense and he’s been building a pipeline.

The expectation is that we’ll continue to build (a) pipeline and continue to acquire companies, focusing in addition to the historical areas we've focused on M&A, which is building geographical presence, industry capability and service line capability, and focus in particular on various aspects of digital, whether it's the interactive area or areas like digital engineering, software engineering which is what Softvision was.” – David Nelson, VP Investor Relations & Treasurer

picture1_81.png“So, in terms of use of proceeds if we were to have some kind of a transaction, all I can point you to is our capital priorities that I went through earlier. We've been very shareholder-friendly. We've given a lot back through dividends and buybacks, and we also have been investing in our business for organic growth, and we would like to do the right kind of acquisition if one presented itself.” – Rajesh Agrawal, CFO & EVP

51e23756-71e7-4de3-b1db-5f4526604bb1-fti.png“Acquisitions, we haven't ruled out. We are wary of them because acquisitions in any space are difficult. In professional services, the people leave down the elevator every day. And yes, people will say buy me out and let me retire, et cetera, I'll hang around for a bit, but that's not the right model. We want to do acquisitions where there are revenue synergies, where people feel joining us would make them more effective. And I think those deals maybe out there, but they are few and far between. So that's the pecking order.” – Ajay Sabherwal, CFO

Equity Trading Overview

Key Trading Statistics3,4

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Public Company Sector Performance1,2

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Economic Trends

A Snapshot of Key Economic Indicators

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M&A Market Trends

Select Recent M&A Transactions4

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Business Services M&A Volume (By Year)4*

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Public Comparables

Public Company Performance3,4

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1. U.S. Small Business Administration

2. McBassi & Company

3. Thomson Reuters

4. FactSet

5. U.S. Bureau of Economic Analysis

6. The Conference Board

7. U.S. Bureau of Labor Statistics

8. U.S. Department of Labor

 

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