GPB Capital Holdings has completed the acquisition of a majority ownership stake in MatrixOneSource, a provider of professional employer organization (PEO) services to small and medium-sized businesses located primarily in Florida. The acquisition represents GPB Capital's first foray into the business services sector.
Jacksonville, Florida-based Matrix provides payroll administration, safety and risk management, benefits administration, tax compliance, unemployment, 401(K) plan, human resource consulting and other PEO services to over 700 companies. Matrix's internal sales team, comprised of 14 business development managers spread across Florida, has driven strong growth.
GPB Capital will provide capital as well as strategic and operational assistance to help Matrix expand its presence in the Southeast and other areas of the United States.
As part of GPB Capital's Business Services investment strategy, the firm will seek to acquire profitable companies that deliver business-to-business services, including human resources outsourcing, facility services and business process outsourcing.
The PEO sector is a segment within human resource services that GPB Capital believes offers attractive investment opportunities. PEO companies specialize in providing human resources management and administrative services to small and medium-sized businesses through a co-employment relationship in which PEOs serve as the co-employers of their clients' employees, while enabling clients to spend more time focusing on their day-to-day and core business operations. While the four largest national PEOs account for approximately 60 percent of the industry's revenue in 2017, the remainder of the market is controlled by hundreds of smaller regional and local companies. With approximately just 3 percent of U.S. companies with under 100 employees utilizing PEOs, according to the National Association of Professional Employer Organizations, PEOs have plenty of room for growth.
“Many small and medium-sized businesses do not have the resources to support a full-time human resources staff. PEOs serve as a vital partner to these organizations, helping them comply with the everchanging myriad of Federal and State regulatory requirements,” said Abhaya Shrestha, managing director at GPB Capital responsible for the firm's business services strategy. “The combination of GPB Capital and MatrixOneSource will create a regional PEO platform which can offer a robust suite of human resources and administrative services to small and medium sized, growth-focused companies at a time when employment regulations continue to evolve and increase in complexity.”
