Talent & recruitment
The question a buyer is answering is whether the desks keep billing once the founder stops.
Recruitment businesses are cyclical, people-dependent and, done well, extremely cash generative. Buyers price the durability of the billing rather than the size of the best year, which is why timing and revenue mix matter here more than in most sectors.
Who acquires in this sector.
The buyer set determines the process. These are the parties we approach on a mandate here, and the reason each of them pays.
What moves the number, and what moves it back.
Both lists are what buyers in this sector actually examine. The first is where preparation earns its return. The second is where processes lose ground once diligence opens.
What lifts the multiple
Worth fixing twelve to twenty-four months before you go to market.
- A contract book with rolling marginTemporary and contract placement produces the closest thing to recurring revenue this sector has, and it is priced accordingly.
- Consultant tenure and ramped desksBilling spread across established consultants, rather than concentrated in the founder's desk.
- Niche specialismA defined discipline with genuine candidate scarcity is defensible in a way generalist recruitment is not.
- Retained and exclusive share of permanent workExclusivity signals client relationship strength and improves fill economics.
- Database depth and complianceA clean, consented candidate database is an asset. An unconsented one is a liability.
What gets discounted
Found in diligence if it is not addressed first, and repriced when it is found.
- Permanent-only earningsFee income that swings hard with the hiring cycle is underwritten cautiously, and often on a trailing average.
- The founder's desk carrying the billingThe single largest driver of structure over cash in this sector.
- High consultant churnConsultants leave with relationships. Attrition history is diligenced closely.
- Contractor gross margin compressingVolume growth on thinning margin is a warning sign, not a growth story.
- Rebate and clawback exposureOff-balance-sheet risk that surfaces in the quality of earnings.
How a process runs here.
Consideration in this sector is frequently structured, so the terms of an earn-out deserve as much negotiating attention as the headline. What counts as billing, who controls the desks during the period, and how the buyer's own hiring affects your number are all decided at the letter of intent stage and are difficult to reopen afterwards.