28th February 2022

Are agencies about to be targeted for M&A by large enterprises to access talent on demand?


£30 million BT Digital deal may spark a trend

Last week news emerged of a deal between BT Digital and Distributed, a company providing access on-demand to technology freelancers through its Elastic Teams platform. The £30 million deal is not simply a fee for services.

The Distributed contract, the first of its kind for BT, secures a board seat and an equity stake in the business. If this sets a trend for enterprises, recruitment agencies and talent platforms, it could well initiate a spate of similar deals as other enterprises seek to exploit the potential for such arrangements.

BT Digital was established in April 2021 to lead its digital innovation agenda. The focus of the unit is development and rapid delivery of innovative products, platforms and services in key areas such as healthcare and data, expanding its capability way beyond the boundaries of conventional ideas of telecoms and the ‘quadplay’ capability (Telephone, Broadband, Mobile and TV) which was perceived to be the industry battleground for a number of years. But what are the benefits for BT Digital and similar enterprise scale businesses? And what’s in it for agencies, recruiters, freelancers and contractors?

Powering the next wave of enterprise innovation

In the case of this particular deal, from the perspective of BT, the intent is to accelerate its digital transformation by allowing the development of new products and services. The arrangement is designed to let BT Digital rapidly onboard multi-skilled digital teams on a project-by-project basis. Key areas of practice include Artificial Intelligence (AI), cloud and product design.

So essentially, this deal is an enabler to provide BT Digital with the right resource to deliver the next wave of BT’s digital services.

Other enterprises in different sectors may have similar ambitions, especially when it comes to the need for skilled technologists. The tech skills gap is real and it is observed to be holding innovation back. In short, advances in technology are not being exploited as quickly as possible due to a lack of talent. The deal struck between BT Digital and Distributed is designed to overcome this barrier.

And that’s good for agencies, freelancers, contractors and enterprises…

Be ready when a major enterprise comes knocking with ETZ!

Whenever the prospect of M&A comes up it can cause time for reflection. For agency principals, it may seem like a good opportunity to exit the business and perhaps even retire from the industry. For others at a different point in the lifecycle, it may be an opportunity to launch the next stage of career development.

Any potential suitor is going to want to undertake a period of due diligence, and profitability will be scrutinised. With ETZ as your trusted RecTech partner, you get access to powerful back office technology that promotes efficiency and maximises profitability.

Our market-leading timesheet, invoicing and payment solution lets recruitment agencies execute error free back office processing, for all agency workers and contractors. To find out more, call us on 0800 311 2266 or book a demo.


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