Wyatt Matas & Associates Announces Outlook for M & A Activity in the Temporary Staffing Industry

Wyatt Matas & Associates' semi-annual outlook for merger and acquisition activity for the temporary staffing industry indicates a dramatic increase for at least the next three quarters.

Tampa, FL (PRWEB) July 14, 2004 -- Wyatt Matas & Associates has released its semi-annual outlook for merger and acquisition activity for the temporary staffing industry. The firm indicates that activity has seen a gradual increase over the first half of the year and is expected to increase more dramatically over the next three quarters.

Chip Measells, Wyatt Matas & Associates Lead Economist, says, With second quarter earning reports due out this month from the majority of the large industry players, we believe their attitudes will indicate that they will be optimistic about the last half of the year. This attitude usually breeds increased activity in mergers and acquisition. Several have already started executing their acquisition strategies that they had shelved before the recession."

Wyatt Matas & Associates also points to the recent merger and acquisition activity. We have seen a slight increase in valuations for small and mid-sized temporary staffing firms. At this point in the industrys M & A cycle, we are seeing mid-sized companies buying smaller companies at very reasonable multiples. This will continue as the mid-sized and large companies start to generate more cash because of increases in their businesses."

We have also seen an increase in smaller companies weighing their exit strategy options. The mom and pops in the industry realized they missed out on the large valuations of the late 1990s and early 2000 and want to make sure that they are positioned to sell their company when the peak of this cycle hits." Mr. Measells continued.

The firm does not believe the rise in interest rates will stifle the trends in mergers and acquisitions because the base is at a historical low. In fact, the firm stated it could see a reverse effect for the short term, as companies look to complete transactions before interest rates get back to normal levels. The most active areas of the country will mostly be the South East and South West as well as up the Eastern Seaboard.

Mr. Measells also says that the hottest segments for mergers and acquisition will continue to be light industrial and niche staffing, such as, travel allied health professional, legal and accounting. Surprisingly, we are seeing some positive activity in the contract IT staffing segment. This segment has been lagging behind the others, but does seem to be slowly catching up. As information technology spending begins to gain momentum, so will the IT merger and acquisitions. With tech earnings expected to be up by 57% for the 2nd quarter, this may happen sooner rather than later. Whether tech slows down or not, niche IT staffing companies will remain a hot item in this M & A cycle" the firm stated.

The firm concluded its release with, The last half of this year will be a very exciting time for mergers and acquisitions in the temporary staffing industry. Because of the methodical gradual improvement in the economy, both buyers and sellers will be able to capitalize on the strategic initiatives and exit strategies, respectively.

Wyatt Matas & Associates is an investment banking firm specializing in small and mid-sized temporary staffing firms. Their services include merges and acquisition management and financial consulting.