MidOcean Partners Invests in The Re-Sourcing Group
January 19, 2024 – MidOcean Partners, a New York City-based alternative asset manager specializing in middle-market private equity and alternative credit investments, has made a significant investment in professional services firm The Re-Sourcing Group. Financial terms of the transaction were not disclosed. This partnership with MidOcean provides Re-Sourcing with the capital and resources to accelerate its growth and further expand its solutions offerings and geographic footprint. Re-Sourcing is a professional services firm providing staffing, consulting and direct hire solutions that specialize in finance & accounting, legal & compliance and IT. The company was previously backed by McNally Capital.
“2023 was an exciting year for our company, during which we were able to significantly expand our presence in the finance and accounting area through the additions of Conexus and Logis CFO,” said Joe Kelly, CEO of Re-Sourcing. “Our partners have built exceptional businesses that provide best-in-class solutions to key industries. As owners and founders, we are well-positioned to capitalize on numerous opportunities, including a continued focus on the offices of the CFO and CCO, as well as technology implementation. We are thrilled to scale the Re-Sourcing platform with the support of MidOcean Partners, which has a proven track record of helping professional services companies execute their growth initiatives.”
MidOcean is a longstanding investor in the professional services and human capital sector. Re-Sourcing marks MidOcean’s fifth investment in the space. Previous investments include GHR Healthcare, a provider of healthcare staffing services; System One, a provider of staffing and outsourced services in the engineering, scientific and technology fields; Global Knowledge, a provider of IT training to corporate clients; and The Planet Group, a diversified professional services organization.
“We are excited to invest behind Joe and his partners, who are proven leaders in serving the offices of the CFO, CCO, and CIO,” said Elias Dokas, managing director at MidOcean. “Re-Sourcing has built an impressive business that has experienced strong growth by delivering superior service to its clients.”
Interpreting Pitchbook’s M&A Report for Human Capital Investing
Despite harsh macroeconomic headwinds that persisted most of last year, above average deal flows persisted in 2022. But, according to the latest research from Pitchbook, it was a marked slowdown in activity from 2021, a record shattering year for M&A. What threw markets off course? According to Jinny Choi, a PE analyst at Pitchbook, staggering inflation led central banks to aggressively raise interest rates in 2022. The U.S. Federal Reserve announced seven rate hikes during the year. Europe also moved away from quantitative easing, leading the Bank of England to raise rates nine times over the same period.
Undaunted, said Ms. Choi, buyers took advantage of cheaper prices, with median deal multiples declining to 8.8x EBITDA. Other factors supported M&A activity, too. PE firms still have $1.3 trillion of dry powder to invest around the globe, enabling sponsors to capitalize on attractive deals spurred by the market downturn that resulted in lower valuations.
“We see numerous opportunities for further growth through both organic initiatives and strategic acquisitions,” Mr. Dokas said. “These include deepening the company’s relationships with existing clients, expanding its service offerings and entering new markets. We look forward to working closely with the Re-Sourcing leadership team, capitalizing on these opportunities and fostering the continued growth of the company.”
Full Suite of Services
Founded in 2003, Re-Sourcing offers a full suite of services catering to the needs of the office of the CFO, CCO, and CIO. The company operates under several brands, including Compliance Risk Concepts, Conexus, JW Michaels, and ExecuSource, among other partner brands, which are strategically located in 20 offices across 10 markets. Re-Sourcing’s brands serve a diverse clientele ranging from Fortune 500 customers to growing middle-market companies and leading institutional investors.
- Compliance Risk Concepts(CRC), which focuses on the office of the CCO, is a provider of actionable and compliance management services within the financial services industry. Founded in 2013, CRC is led by a business-focused team of senior executives who offer clients compliance risk management services on an as-needed, project or part-time basis.
- Conexus, which focuses on the office of the CFO, is provider of interim consulting, advisory, and direct hire talent solutions. Since its founding more than a decade ago, Conexus has sourced high-quality candidates in the C-suite and middle-management with specialized skill sets.
- JW Michaels & Co., which focuses on the office of the CCO, is a provider of direct hire, staffing, and consulting solutions for Fortune 100 customers, investment managers and financial service companies. Founded in 2010, JW Michaels’ tenured team has provided clients legal and compliance talent solutions.
- ExecuSource, which focuses on the office of the CIO, is a provider of strategic staffing and direct hire solutions. It was founded in 1998.
MidOcean Partners is a New York-based alternative asset manager specializing in middle-market private equity and alternative credit investments. Since its inception in 2003, MidOcean Private Equity has targeted investments in high-quality middle-market companies in the consumer and business services sectors. MidOcean Credit was launched in 2009 and currently manages a series of alternative credit strategies, collateralized loan obligations (CLOs), and customized separately managed accounts.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media
