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Healthcare Staffing Market Analysis – February 2014

Industry leaders continue robust M&A activity

The $14 billion U.S. healthcare staffing and physician outsourcing industry is expected to continue growing due to increased demand for outsourced recruitment services and the need to cut healthcare expenditures. M&A activity in this industry has continued to grow as the economic recovery progresses.

Revenue multiples in the public markets are currently tracking at a median of 0.8x, while EBITDA multiples have a median of 11.5x. Since the end of 2012, these have grown 60% and 13% respectively.

Transaction multiples are tracking in a slightly lower range, with median revenue multiples of 0.6x and median EBITDA multiples of 9.0x over the past two years. Lower multiples in 2011 and 2012 partially attributed to the difference. While the market underperformed the S&P index from late 2011 to mid 2012, recent regulatory pressures for hospitals to cut costs have renewed industry growth, which has been reflected in public market valuations.

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