The January 2025 Recruitment Services and HR Tech M&A Recap

LongBoard tracks M&A headlines and shares insights from leading recruitment service and HR tech companies. We also help our clients acquire great businesses.

Author

KC Clark
February 04, 2025

There were 19 acquisition announcements to kick-off 2025. That is a 46% increase in deals tracked compared to January 2024. The sentiment at the end of last year was that deal volumes were down due to rising interest rates, election, and poor business performance, but outlook for 2025 is optimistic. Here is a recap from January’s deal activity and one big Deel update!

January Deal Highlights:

GEE acquires Hornet Staffing - Staffing & MSP.
Takeaway: GEE acquired 100% of Hornet Staffing for $1.5M in a cash + seller financed deal. This is a small transaction however there are two aspects that speak to much larger trends that staffing world is monitoring: 1) the prevalence of MSP/VMS among enterprise clients and 2) offshoring recruitment. The list of roles that are NOT being offshored is getting smaller and smaller.

Harris acquires staffing software firm Coats - HR Tech.
Takeaway: Harris Computer Systems (an operating co within the $9B Constellation Software giant) acquires COATS Staffing Software. This is CSI's second investment into HR technology. They have acquired over 500 companies since 1995. Given their focus to “invest in vertical market software businesses,” the relatively nascent HR Technology industry may be their next vertical focus. COATS is the second of more HR tech acquisitions to come.  

512Financial acquires AustinPeopleWorks - Staffing.
Takeaway: This is not the largest deal from this month but it's an interesting strategy. 512F is a fractional F&A service provider. Acquiring APW diversifies the platform with a staffing team to add to their F&A and HR services. Fractional and staffing services are cousins… or maybe “fractional” is just the latest rebrand attempt of “staffing.”

Karat acquires assessment platform Byteboard - HR Tech.
Takeaway: Identifying quality candidates is every employers goal. Candidate assessments are a proven method to filter for quality, with varying degrees of effectiveness. Technical assessments have been the norm and Byteboard built their platform around these to determine readiness for a job through project-based evaluations. The next frontier is assessing quality of the less technical roles. 

LightBay Capital acquires majority stake in Ro Health - Staffing.
Takeaway: Ro Health has swapped PE partners from Achieve to LightBay. In a growing area of healthcare staffing, Ro Health is becoming a market leader of educational healthcare staffing services. The company was acquired by Achieve in 2021 which makes this a quick turnaround for them to exit. Especially given Ro Health and Achieve's alignment mission of investing in the future of learning.

Other January Deal Headlines:
A Big DEEL:

Deel announces new investors and $800M run rate - HR Tech.
Takeaway: Last year, Deel completed four acquisitions of other payroll, L&D, onboarding, and employee compensation platforms. This YC alum is certainly on a growth mission fueled by big investment dollars, global organic growth, and M&A. A playbook many VC backed tech companies have followed before, but get this...they're profitable!

Did you read about any other deals we may have missed? If so, please reply with details. LongBoard will review and add our commentary in next month’s M&A brief!

ALSO, if you ever want your company name to appear in one of these headlines, The LongBoard Group would love to help!

More deals to come. 

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