B2B Marketplaces Maintain Acquisitive Growth Strategy
Food systems are among the largest causes of climate change, with about 25% of greenhouse gases coming from the agriculture and food industries. Ag-Tech and B2B marketplaces continue to raise significant capital and climb in importance within the industry. They provide the necessary support to farmers actively seeking new ways to combat climate change. With its latest capital raise, Farmers Business Network, Inc. is focused on further investing in technologies that lower costs, improve transparency, and create local community development opportunities within agriculture. Other B2B marketplaces like Indigo focus on grain trading and carbon business, helping farmers adopt regenerative practices that sequester soil emissions. Marketplaces are acquiring to scale and provide their customers an ever-expanding range of services to improve the sustainability of their practices, a trend expected to continue in 2021.1 2 3 4 5
Staffing Industry Experienced Market Imbalance
Within the Staffing Industry, a reduction in corporate profitability, driven by the pandemic, has impacted the M&A market as firms are delaying exit strategies until company performance improves. This M&A market imbalance, with more buyers than sellers actively present, is particularly true in niche staffing markets more heavily impacted by the pandemic. Many high-quality buyers remain, particularly strategic PE groups looking to expand on platform investments, seeking to drive increased returns ahead of their exit strategies. Noticeably absent from the M&A market are public U.S. staffing companies. Of the 115 staffing transactions completed in 2020, only 21 were closed by a publicly traded firm. Strategic buyers will remain focused on IT, Healthcare, and Professional Services staffing as the most attractive industry niches. 6
Blockchain Technology Tapped to Strategically Redesign Stressed Waste Management Processes
Blockchain technology drives strategic transformation within the waste management industry given its ability to allow for the end-to-end tracking of waste. Arep, a subsidiary of SNCF, relies on this technology to track waste at its train stations. In Argentina, Jelly Coin, a new coin created by Ivan Zubilewicz, aims to facilitate waste collection through waste collector compensation. RecycleGo, a NY-based startup, seeks to integrate blockchain technology into the recycling space using QR codes tracked on a blockchain. The technology will enable companies to track recycling as it is broken down into raw materials and turned into merchandise. The Waste Management industry, through blockchain, may have a way to successfully deal with some of the obstacles that have developed over the past few years in dealing with increased levels of recycled plastic.7 8
Redefining CPA Advisory Relationships
As the accounting industry reels from increased client demand experienced due to the pandemic, CPA firms have been strategically redefining their relationships as “holistic advisors,” guiding short and long-term business strategy, in addition to traditional audit and compliance work. Practice Management Software will become increasingly important as firms continue to offer diversified services to clients. This change will ultimately drive further consolidation in the market, as large firms seek to acquire in-demand technology offered by younger competitors. Diversification of client services, focused on providing value-added advisory work instead of just audit and compliance work, will drive enhanced valuation multiples during the expected consolidation.9 10
Law Firm Industry M&A Picking up Speed
Delayed legal issues and pent-up demand stemming from the pandemic are expected to benefit the legal industry significantly as the economy grows and investor confidence stimulates M&A deal activity. As businesses continue to transform their digital infrastructure and cybersecurity concerns increase, it is expected that increased demand around intellectual property, anti-trust, and data related litigation will further bolster industry performance. Domestic mid-sized firms are expected to pursue M&A opportunities to enter new markets faster and more efficiently. M&A activity within the industry is returning to historical levels as company leaders begin to re-shift focus to long-term, strategic management. M&A activity has been focused on acquisitions of smaller firms; on average, acquiring firms had 64x the acquired employees. As its clients continue to face dynamic and complex challenges, law firms remain under pressure to deepen their scope and scale.11 12
Largest Transactions Closed
- Remainder of multi family tenant screening business of CoreLogic, Inc.
- DirectPath, LLC
- CNO Financial Group, Inc.
- Certain Assets of Snelling Staffing
- HQ Snelling Corporation
- Working Not Working, Inc.
- Fiverr International Ltd.
- Franchised operations of LINK Staffing
- HQ Link Corporation
- RLJ Talent Consulting, Inc.
- Recruiter.com Group, Inc.
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes