Hello,
Has anyone looked into staffing businesses? What are EBITDA multiples?
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So, I guess the caution is that multiples will swing wide in a downturn - the 'worst case' scenario should be intense.
That said, a lot of recruitment firms have moved to a decently healthy mix of temporary/contract employment and permanent. In a downturn, the contract piece should hold up better or even grow as firms put off hiring permanent as a hedge to the uncertainty (but according to a Bloomberg interview with a senior leader at Manpower that isn't happening right now - still labor hoarding and adding permanent net-net).
I can't speak to multiples, plus being in Canada deals price different, but I would say look at the revenue split. You may even want to attribute separate multiples as per the split between contract (ie. recurring) and permanent placement revenue. Also, on the contract side, typically the recruitment firm will carry the payroll costs, so ensure to factor a higher level of Net Working Capital if contract employment is part of the revenue model.
Good luck!