Leading executive search firm Korn Ferry announced Dec. 1, 2015, that it has completed its acquisition of global HR consultancy Hay Group.
The purchase, first announced in September 2015 for about $452 million in cash and stocks, evenly splits the focus of the company between talent acquisition and human-capital management advisory services.
The deal will enable Korn Ferry to diversify its revenue stream by selling talent management advisory services when companies aren’t hiring.
Korn Ferry CEO Gary D. Burnison said in September that layoffs may be ahead for support staff in functions like finance and information technology. The company also plans to combine some offices to save on real estate costs. Korn Ferry’s 3,900 employees operate in 78 offices in 37 countries, while Hay Group’s 3,000 workers are in 88 offices in 50 countries.
“This is incredibly transformative for our organization and it will cement our firm as the pre-eminent global people and advisory firm,” Burnison said during an investor call.
Burnison said the acquisition brings together $1.7 billion in projected business. “I’ve been thinking about this for a very long time,” he said, adding that he first reached out to Hay Group about eight years ago.
Underpinning the acquisition is Hay’s intellectual property and one of the most comprehensive leadership, reward and assessment databases in the world, he said.
Korn Ferry will serve clients through three business lines: executive search, Hay Group (which now includes Korn Ferry’s former leadership and talent consulting segment), and Futurestep, a professional search and recruitment process outsourcing company.
“It’s really a string of pearls, a complete consultancy when it comes to the world’s most precious commodity—people,” he said. “The combination of our two firms brings together nearly 7,000 talented professionals who have a single purpose: helping leaders, organizations and societies succeed by releasing the full power and potential of people.”
Stephen Kaye, CEO of Hay Group, described the buyout as “a historic moment” that will reshape the future of work. “With more than a century of combined experience, and some of the most prolific people, data and insights in the world, we now have an incomparable capacity to deliver superior results for our clients—ensuring they have the right people, fully aligned, developed and engaged,” he said in a statement.
Korn Ferry, based in Los Angeles, acquired leadership training firm PDI Ninth House in 2013 and executive-education company Pivot Leadership earlier this year. The Hay Group acquisition is Korn Ferry’s largest to date.
Philadelphia-based Hay Group advises clients on people strategy and organizational performance, including organization and workforce design, recognition, culture, and engagement. Hay Group also has developed assessment and evaluation tools and owns pay and skills data for thousands of companies and millions of executives. Eighty percent of Hay’s business is outside the U.S., mostly in Europe and Asia.
Roy Maurer is an online editor/manager for SHRM.
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