Selling a recruitment agency in the UK

You own a UK recruitment agency worth between £5M and £50M in enterprise value. A specialist permanent agency in a defined sector. A contract or temp recruitment platform with a strong NFI book. A blended perm-and-contract business. A specialist executive search firm with retained mandates. You have a brand, a database, a consultant team, and — most likely — a top biller or two who carry a disproportionate share of revenue.

The buyer pool in UK recruitment is segmented and active. PE consolidators rolling up specialist niches (tech, finance, life sciences, energy, construction). Larger international staffing groups buying for capability or geography. Trade buyers in adjacent specialisms looking for cross-sell. Buyer composition for a specialist tech agency looks very different from a specialist healthcare agency, which looks different again from a generalist multi-sector business.

We engage 12 to 24 months before a target exit. The longer window matters because the highest-return preparation work in recruitment — building out consultant retention arrangements, addressing top-biller concentration, surfacing NFI quality cleanly, and demonstrating sustainable margin through the cycle — takes time. Owners who address these honestly before going to market consistently outperform.

This is not the right fit if your business is below £5M EV, or if more than 40% of revenue depends on one or two consultants who have not been engaged with the transaction story. The latter is fixable but takes time and is best addressed before, not during, a process.

Buyer diligence in UK recruitment M&A is sharper and more granular than in many other sectors. Five items dominate.

NFI quality first. Buyers will diligence NFI by consultant, by client, by sector, by month, and through the cycle. Premium pricing requires NFI that has held or grown through the 2023-2024 market dip, with low concentration by consultant and client.

Consultant retention and top-biller concentration second. The single biggest diligence concern. Where 30%+ of revenue depends on one or two consultants, the multiple discounts materially unless those consultants are on documented lock-ins with meaningful upside. Pre-process work to build out the wider consultant team and to engage top billers properly with the transaction is the highest-ROI preparation work in this sector.

Perm vs contract mix third. Contract and temp revenue is generally valued at a premium to perm because of higher visibility and lower cyclicality. The right way to surface this is contractor margin (NFI per contractor) and contractor count trajectory, not gross revenue. We help owners present this properly.

Client concentration and tenure fourth. Anchor clients representing more than 20% of NFI are a flag. What buyers want to see is multi-stakeholder relationships at each major client, multi-consultant servicing, and contractual position (where applicable, master service agreements, preferred supplier status).

Database depth and tech stack fifth. The CRM, ATS, candidate pipeline, and data hygiene. A well-maintained database with clean candidate records, AI-assisted matching tooling and integrated workflow attracts premium pricing. A database on legacy software with patchy data hygiene does not.

Our six-stage process runs senior-led across the full mandate. For recruitment, three things shape execution.

Earn-out structuring is more material in recruitment than in any other sub-sector we work in. Buyers expect a portion of consideration tied to post-completion NFI, and the design of the earn-out drives more outcome variance than the headline multiple. We work with owners to negotiate earn-out terms — measurement basis, cap, accelerators, leaver provisions — that protect against the asymmetric risk founders typically carry through earn-out periods.

Consultant engagement is structured into the process design from the start. We work with owners to decide how and when top billers are told about the transaction, what retention arrangements look like, and how to structure equity or bonus arrangements for the consultant layer. Getting this wrong damages both the deal and the team.

Buyer mapping is sub-sector specific. The active PE consolidators in tech recruitment are not the same as in finance recruitment, life sciences, or specialist permanent. Our buyer mapping segments by your specific niche from day one. See the business services pillar for context and HR and payroll for an adjacent specialism.