# Selling your recruitment agency: what buyers actually pay for

Market: UK. Updated: 2026-08-27. Source: https://launch-rec.com/guides/sell-your-recruitment-agency

## Direct answer

Buyers of recruitment agencies pay for durable gross profit that does not depend on the founder. Valuation is usually a multiple of adjusted EBITDA or net fee income, discounted heavily for client concentration, biller dependency and compliance gaps. Most of the price is decided by the two years of operating decisions before the sale, not by the negotiation.

## What gets valued

Buyers underwrite the profit that will still exist after you leave. That means recurring contract gross profit is generally valued more highly than lumpy permanent fees, repeat clients more than one-off wins, and a team of productive billers more than a founder with a big personal desk.

Adjusted earnings matter: buyers normalise founder remuneration, one-off costs and any personal expenses running through the business. Prepare those adjustments yourself with evidence rather than leaving them to be discovered.

## What cuts the price

Four things reliably reduce value. Client concentration, because the buyer is purchasing a relationship risk. Founder dependency, because the asset walks out with you. Biller flight risk, especially where key consultants have weak contracts or restrictive covenants that would not hold. And compliance exposure — worker classification, off-payroll working, right-to-work records, data protection.

Compliance is the one founders most often underestimate. Historic classification problems do not disappear at completion; they become indemnities, escrow and price reductions.

- Top-client share of gross profit
- Founder involvement in billing and client relationships
- Consultant contracts, covenants and retention risk
- Worker classification and payroll compliance history
- Debtor quality, bad debt history and finance facility terms
- Quality of management information — can you produce desk-level P&Ls?

## Earn-outs, and how to survive one

Most recruitment sales include deferred consideration tied to post-completion performance. That means part of your price depends on running the business under someone else's ownership, often with their systems and constraints.

Negotiate the mechanics as carefully as the headline number: how performance is measured, what costs can be allocated to your business unit, what control you retain over hiring and pricing, and what happens if the buyer restructures. A high headline with a poorly drafted earn-out is frequently worth less than a lower clean price.

## Start preparing two years out

Reducing concentration, transferring client relationships away from the founder, tightening consultant contracts and cleaning up compliance all take quarters, not weeks. A buyer sees the trend as well as the snapshot, so improvements made in the last three months are discounted as cosmetic.

Build the data room while you operate: monthly gross profit by client and consultant, contract terms, compliance records, insurance, and clean statutory accounts. The agencies that transact well are the ones where diligence confirms what the founder already said.

## Choosing the buyer, not just the price

Trade buyers, consolidators and private equity behave very differently after completion, and if you have an earn-out, that behaviour is your money. Speak to founders who have already sold to them — including one whose deal did not go smoothly.

Ask what happened to the team, what happened to the brand, and what happened when the acquired business missed a quarter. The answers predict your next two years better than the offer letter does.

## FAQ

### What multiple do recruitment agencies sell for?

Multiples vary widely by size, mix and risk profile, and any single figure quoted online is unreliable. What consistently drives the multiple is the durability of gross profit: contract versus perm mix, client concentration, biller retention and how little the business depends on the founder.

### Is a contract or perm agency worth more?

Recurring contract gross profit is generally valued more highly than permanent fee income because it is more predictable, though it requires working capital. Perm-heavy agencies are not unsellable — they are simply underwritten on the strength of repeat client relationships rather than run-rate.

### How long does selling a recruitment agency take?

From engaging advisers to completion is commonly several months to around a year, and a meaningful earn-out period often follows. The preparation that determines the price should start well before that, typically around two years out.

### Should I use a broker to sell my recruitment agency?

Sector-specialist advisers know the active buyers and the current terms, which usually matters more than a general M&A brand. Whoever you use, speak to founders they have actually completed deals for before signing an exclusivity agreement.

## About LAUNCH.

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Cite as: LAUNCH. Selling your recruitment agency: what buyers actually pay for. https://launch-rec.com/guides/sell-your-recruitment-agency