RGF Executive, the search arm of Japanese company Recruit Holdings, has signed a deal worth nearly Rs 150 crore with Stanton Chase India managing director R Suresh to buy the domestic search firm as well as two other companies owned by him - NuGrid Consulting
and Orane Consultants. The deal is likely to be completed by this week,
and comes in the wake of a flurry of acquisitions in the Rs
25,000-crore Indian recruitment industry marked in recent times by
multinationals dropping anchor, small boutique firms struggling to
survive the slowdown and clients preferring a one-point contact for
hiring.
In India, Stanton Chase works on a franchise model where Suresh is a
majority owner and the India franchisee pays a licence fee to Stanton
Chase International for using the brand name. Suresh co-owns NuGrid and
Orane with Sanjay Muthal. Suresh denied the deal. "RGF is talking to
many firms. They are a $10-billion group. I have heard that they are
talking to one other international firm," he said, in an email response.
Industry sources, however, confirm the deal has taken place and say payment will be on a milestone basis, where Suresh will enter into a three-to-five-year contract as head of the new alliance in India. "This is a good move because we do not have too many transactions in the HR space and the valuation is good in this market," said the head of a search firm who did not wish to be named. RGF Executive has more than 40 consultants working from Tokyo, Hong Kong and Singapore and has plans to expand India operations.
Anil Kumar, general manager for RGF India, declined comments. The Japanese firm has a history of inorganic growth, with purchases like US-based CSI Companies and Staffmark Holdings and Advantage Resourcing based out of the US and Europe. It also bought job search engine Indeed Inc in 2011. Buys in India are next in line, say industry sources.
Such acquisitions make sense even from the clients' perspective. "They do not want to go to one vendor for search hiring and another for mass hiring," says Navnit Singh, chairman and regional MD for Korn/Ferry International. Global firms buy more Indian boutique companies because the latter will not be able to survive on their own, he adds. Besides, they are looking at India, China and Japan for business, leading to this flurry. Promoters are now getting a better value than they would have a few years ago, says the head of another search firm on condition of anonymity.
Deals in the recruitment industry kicked off last year when Italy-based Gi Group bought a 49% stake from its joint venture (JV) partner Elixir Web Solutions for up to Rs 100 crore. The $2-billion staffing giant forayed into India through the JV with the mid-level search and recruitment process outsourcing firm in 2008. The Italian company had a 51% stake in the JV, while 49% belonged to Delhi-based Elixir's MD Vipul Prakash.
In May 2013, Bangalore-based Ikya Human Capital Solutions bought out its residual stake of 49% in subsidiary Magna Infotech and 26% in Avon Facilities Management (earlier Avon Management Services), for 60 crore. "Paid in two tranches, we have invested 120 crore in both the firms," confirmed chairman and MD Ajit Isaac. The recruitment company, backed by private equity firm India Equity Partners, saw travel services firm Thomas Cook (India) acquire 74% stake for Rs 256 crore in February this year. And in another milestone on its inorganic growth path, Ikya bought a food services company in Chennai last Thursday for a "small amount," says Isaac.
Industry sources, however, confirm the deal has taken place and say payment will be on a milestone basis, where Suresh will enter into a three-to-five-year contract as head of the new alliance in India. "This is a good move because we do not have too many transactions in the HR space and the valuation is good in this market," said the head of a search firm who did not wish to be named. RGF Executive has more than 40 consultants working from Tokyo, Hong Kong and Singapore and has plans to expand India operations.
Anil Kumar, general manager for RGF India, declined comments. The Japanese firm has a history of inorganic growth, with purchases like US-based CSI Companies and Staffmark Holdings and Advantage Resourcing based out of the US and Europe. It also bought job search engine Indeed Inc in 2011. Buys in India are next in line, say industry sources.
Such acquisitions make sense even from the clients' perspective. "They do not want to go to one vendor for search hiring and another for mass hiring," says Navnit Singh, chairman and regional MD for Korn/Ferry International. Global firms buy more Indian boutique companies because the latter will not be able to survive on their own, he adds. Besides, they are looking at India, China and Japan for business, leading to this flurry. Promoters are now getting a better value than they would have a few years ago, says the head of another search firm on condition of anonymity.
Deals in the recruitment industry kicked off last year when Italy-based Gi Group bought a 49% stake from its joint venture (JV) partner Elixir Web Solutions for up to Rs 100 crore. The $2-billion staffing giant forayed into India through the JV with the mid-level search and recruitment process outsourcing firm in 2008. The Italian company had a 51% stake in the JV, while 49% belonged to Delhi-based Elixir's MD Vipul Prakash.
In May 2013, Bangalore-based Ikya Human Capital Solutions bought out its residual stake of 49% in subsidiary Magna Infotech and 26% in Avon Facilities Management (earlier Avon Management Services), for 60 crore. "Paid in two tranches, we have invested 120 crore in both the firms," confirmed chairman and MD Ajit Isaac. The recruitment company, backed by private equity firm India Equity Partners, saw travel services firm Thomas Cook (India) acquire 74% stake for Rs 256 crore in February this year. And in another milestone on its inorganic growth path, Ikya bought a food services company in Chennai last Thursday for a "small amount," says Isaac.
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