Published in Economic Development
Clark Galloway, president and CEO of Edustaff. Clark Galloway, president and CEO of Edustaff. MIBIZ PHOTO: KATY BATDORFF

Substitute staffing firm Edustaff attracts PE backing to propel national growth

BY Sunday, February 26, 2023 06:00pm

Grand Rapids-based Edustaff LLC has quickly grown over the last dozen years from a regional company to the third-largest staffing organization in the country for substitute teachers.

To support the company’s ongoing growth, however, executives realized they needed to make a change to Edustaff’s business model.

“I’m good at building a company from zero to mid-cap, but the skillset to take it from a mid-cap organization to a larger company requires a different bench of leadership,” said Edustaff President and CEO Clark Galloway. “Those are the factors a year ago that led us to go down this path with our organization.”

Professional Services

Edustaff LLC

  • Business description: Grand Rapids-based staffing company that recruits, trains and manages substitute teachers across the country, mainly in the K-12 market

  • Annual sales: More than $400 million

  • Top executive: Clark Galloway, president and CEO 

  • Total Michigan employees:
    about 32,000

  • Advisers: Lincoln International (investment banking), Barnes & Thornburg LLP (legal), and Stonehenge Consulting PLC (accounting) 

Edustaff’s small group of shareholders agreed last year that the company needed a different owner to maintain its current growth trajectory. They engaged with Chicago-based broker Lincoln International, which shopped Edustaff to 10-12 large firms, ultimately landing on PPC Enterprises LLC. 

The New York-based private equity firm closed on the transaction on Dec. 8, 2022. 

The acquisition earned Edustaff recognition as the winner of the 2023 MiBiz M&A Deal of the Year Award in the professional services category.

Formed in 2010, Edustaff pools people together for substitute teaching approvals, training, hiring and placement in school systems across the country. The company also recruits and screens substitutes, and manages and pays the employees throughout their whole substitute teaching career, removing a “significant burden” for schools, Galloway said. 

Edustaff mainly serves the K-12 market, but will place substitutes for adjunct and distance learning professors at the collegiate level.

Substitute teaching and employment needs have greatly increased since the pandemic, Galloway added. Executives had to shutter the business for about six months and worked with school districts to come up with unique ways of placing substitutes in other capacities, he said.

“The pandemic allowed us to springboard,” Galloway said. “We were starting to serve districts nationally and it built up a lot of pent-up demand.”

In the pre-pandemic environment, Edustaff was able to meet an average of about 85 percent of absentee staffing requests from schools, but that dipped to the upper sixties as of 2021, Galloway said. Fill rates are now increasing into the upper 70 percent range, but still have not recovered to pre-pandemic levels, largely because schools are putting in absentee requests at higher levels than before the pandemic. 

Selling the company to PPC Enterprises allowed Edustaff to give additional perks to its employees, and make additional charitable contributions as well, Galloway said. The transaction also made sense because PPC Enterprises invests in the pensions of public school teachers, Galloway said.

“It was a good, aligned fit for us, and it allows us to continue to grow and will also help us find additional leaders to carry the company to the next level,” Galloway said.

PPC Enterprises has been fairly hands-off with the company, as the acquisition will give Edustaff the resources to hire leaders that are more experienced overseeing a national company, Galloway said, who plans to stay on through the transition period.

Edustaff is now the third-largest substitute staffing organization in the nation in a field of about 30 companies. The firm has about 47,000 employees across the 10-12 states that it serves.

“We’re just continuing to grow and expand our national footprint, which is exciting for us and we’re seeing more and more of a need for our product in the national industry,” Galloway said. 

Future growth opportunities could come by expanding the large pool of certified substitutes into adjacent roles within the industry.

“We’re looking at expanding into various adjacent areas of staffing needs such as tutoring programs and growing pre-kindergarten programs that schools are starting to roll out,” Galloway said. 

Read 1542 times Last modified on Monday, 27 February 2023 15:17