Most sectors are facing a labor shortage crisis right now. And with the Omicron variant still spreading, healthcare systems are constrained and the need for healthcare providers has never been more dire. In comes private equity, where dealmakers are predicting M&A among industry staffing providers will only rise.

Alto Healthcare Staffing was recently acquired by Littlejohn Capital. The target focuses on travel and per diem healthcare providers, and says it has a workforce that is available to deploy to assist with long term gaps as well as crisis needs. 

“There is a nationwide shortage of nurses across the United States that is driving a greater need for high quality and unique staffing agencies, such as Alto, to help supply the best healthcare talent to care for the baby boomer generation,” Littlejohn president Angus Littlejohn III tells Mergers & Acquisitions. “Given the industry dynamics, we think this will give competitive advantages to well capitalized companies in the sector and result in increased activity for mergers and acquisitions in the coming years.” Littlejohn is the family office of Angus C. Littlejohn Jr., co-founder of Littlejohn & Co.

Littlejohn is not the only PE firm that sees this trend. In December, MidOcean bought GHR Healthcare from Platform Partners. At the time, MidOcean said it sees healthcare staffing “as a key thematic area” based labor on shortages and the rising demand for healthcare professionals.

For investors, now is a good time to start looking at healthcare staffing businesses.

Demitri Diakantonis