Get Out of the Bargain Basement and into Bond Street

Itís time to splash the cash, thatís the message from leading Recruitment Agencies industry analysts Plimsoll Publishing and their annual acquisition survey. The study looks at the fortunes of 1500 recruitment agencies companies.

The findings come at a time when you itís impossible to pick up a paper, or see the news, without seeing a story about how the credit market is affecting the performance of UK companies and slowing acquisition activity. However, Plimsollís Acquisition Study finds that the UK Recruitment Agencies industry is awash with cash and companies should use this time to go on the offensive and buy up the competition.

The report found that the driving force of this move in the market is a group of 762 companies who, over the last few years have built up a stock resource of cash, putting them in a very strong position. David Pattison, Senior Acquisition Analyst, comments:

ìThere is absolute evidence that the rich are getting richer as the gap between those making massive profits and those missing out has widened in the last few years. There has never been a better time for these dynamic companies to splash the cash.î

The report suggests that 2008 is the perfect time to consider an acquisition, but also points out that the profile of acquisition needs to change, as David Pattison explains:

ìFor years, acquisition activity in the recruitment agencies industry has been driven by distressed fire sales. Acquirers have been reluctant to invest heavily, instead they have been content to snap up bargain basement companies often getting bad deals, paying peanuts and getting monkeys. This attitude needs to change. What our report suggests is that companies need to look at the wider strategic picture and spend their money wisely.î

As part of the study, each of the UKís top 1500 recruitment agencies companies have been valued and assessed on their future prospects. The report finds that there are 402 companies in the market who would make good strategic acquisitions. These attractive companies are operating in the growth areas of the market and are all extremely profitable.

David Pattison continues, ì Having the resources to buy one of these 402 powerful players is the perfect situation. In doing so, you take a strong adversary to your own company out of the market immediately, and it will instantly be generating profitability. The next step is then to focus your attention on the 187 companies we have identified who are failing anyway, pushing them out of the market. This may sound harsh, but if the industry is to develop and evolve then there will need to be casualties. Our latest study shows the candidates least likely to survive 2008 are pretty obvious.î

The just published analysis is aimed at companies needing an insight into the acquisition activity in the UK Recruitment Agencies industry, or those looking to find top prospects in the market. Copies are available from Plimsoll Publishing priced at 350; readers can claim a 50 discount. Call Clair Sherwood on 01642 626422 or e-mail c.sherwood@plimsoll.co.uk. Visit www.plimsoll.co.uk