It’s hard not to wonder what Edward “Ned” Hay would say about the announcement that consultancy Korn Ferry has entered into a definitive agreement to buy Hay Group, the late founder’s namesake consulting firm, for $452 million.
With the addition of Hay Group, Korn Ferry will have an unrivaled ability to support the global business community in attracting top talent and designing compensation and reward incentives, with an integrated approach to the entire leadership and people continuum.
Perhaps so, but clearly Korn Ferry has elbowed its way into a most competitive landscape.
Upon completion of the integration, Korn Ferry will face an evenly split portfolio between recruiting and human-capital management, with both areas accounting for roughly half of the business.
While there will be a new owner in Korn Ferry once the deal is completed, the Hay name will remain.
Truth be told, the announcement was of great interest to us, not only because of our history with the Hay family but also because Hay Group’s Chicago office is located on our floor. The deal is subject to Hay Group shareholder approval, antitrust clearance and other customary closing conditions.
An opportunity for cross-selling, says Burnison, stating: “Much like somebody goes to the gym and exercises and has a personal trainer, why shouldn’t somebody be able to turn to an organisation to improve their lives, and improve their skills?”
Immediately following the closing of the transaction, Korn Ferry will combine Hay Group with Korn Ferry’s Leadership and Talent Consulting segment and brand the combined advisory business as Hay Group.
Korn Ferry will pay Hay Group about $252 million in cash, net of estimated acquired cash, and $200 million in the company’s common stock. Combined, the businesses would be on a current run-rate basis of about $1.7 billion.
The targeted cost synergies relate primarily to operating efficiencies expected to be realized by leveraging technology platforms and reducing general, administrative, and real estate costs.
Founded in 1943, Hay Group has 3,100 employees spread in 50 countries, making it one of the larger specialised HR consultancies of the globe. Korn Ferry will be conducting a conference call on Thursday, September 24, 2015 at 9 a.m. EDT to discuss the transaction. The amended facility will have a five-year maturity.