Olympus Partners’ acquisition of Vaco further validates the market for temporary staffing focused on harder-to-find skills like accounting and healthcare IT.
The Stamford, Connecticut, sponsor is buying its majority stake in Vaco from Quad-C Management. Quad-C is exiting after about doubling Vaco’s revenue to the $450 million-plus range during its three-year hold.
Vaco’s management, including Co-Founder and CEO Jerry Bostelman, will stay on as investors and continue to lead the company.
Vaco’s growth shows that what has historically been done with lower-skill roles in the temporary-staffing arena is now beginning to play out from a more specialized skill perspective, Jason Miller, a partner at Olympus, told Buyouts.
“I think what you’re going to see is increased use of contract labor for higher-end finance and accounting roles. And in the IT space there has certainly been a shift to higher-skilled positions,” Miller said. “Because [companies like Vaco] are positioned at a higher bill rate, the space is less competitive.”
Quad-C Managing Partner Steve Burns added that companies are increasingly emphasizing the need for quality IT as it relates to [enterprise resource planning] and [customer relationship management] systems, as well as from a cybersecurity perspective: “You need to be good at it or you’re going to get creamed.”
At the same time, the need for experts in these areas to consult on specific jobs over six to nine months is increasing: “A lot of this is day-to-day stuff, but a lot of it’s project-driven.”
Olympus, for its part, has actively looked at a number of opportunities in the staffing space over the past two years, Miller said, having participated in the William Blair sales process for another player in the market, Addison Group. Trilantic North America in December 2016 concluded its auction for Addison, ultimately selecting Odyssey Investment Partners as the winning suitor.
Olympus subsequently was among those to get an early look at Vaco, Miller said.
Indeed, William Blair ran what Quad-C’s Burns described as a fairly focused process for Vaco. Parties that had established an interest in the sector were identified early on, he said.
Vaco, similar to Addison, offers executive search and specialized consulting services focused in accounting, finance, tech and healthcare IT. The company was founded in 2002 by Bostelman, Jay Hollomon and Brian Waller, and today encompasses more than 35 offices, 780 employees and 4,300 consultants.
While Vaco under Quad-C’s ownership did execute seven add-on acquisitions, the vast majority of the company’s growth came organically and largely by adding personnel, Burns said.
Both PE executives indicated that the temporary-staffing industry would remain on their radars.
Miller said Olympus would continue to evaluate opportunities on the nurse-staffing front, a vertical in which the sponsor has been an active investor.
Olympus years ago owned AMN Healthcare, taking the medical-staffing giant public in 2001. It later purchased Club Staffing, which was sold in 2006 to Pathfinders and now is a subsidiary of AMN.
In recent notable deals in travel-nurse staffing, Beecken Petty O’Keefe in May sold its majority stake in Medical Solutions to TPG Growth. The deal followed a Jefferies-run sales process, producing a deal valued at around $500 million, Buyouts has reported.
Other notable PE-backed healthcare-staffing companies to keep tabs on are Trivest Partners-backed travel-nursing company Professional Placement Resources, as well as Snow Phipps Group’s HCTec, which provides staffing and consulting services focused in healthcare IT and health-information management.
Action Item: Check out Olympus’s portfolio: www.olympuspartners.com/investments
Graphic courtesy of IR_Stone/iStock/Getty Images
Correct: A previous version of this story incorrectly identified Trilantic North America. The story has been corrected.