May 13, 2015 – February 6, 2015 — When CEO Geoffrey Hoffmann looks at CTPartners Executive Search, he sees Europe, Australia and robust practices in financial and professional services.
This means looking past the CTPartners’ present reality: to wit, a stock price that plummeted 24 percent in December following news reports that the firm routinely discriminated against female employees and that its CEO Brian Sullivan stripped at a company event. The Equal Employment Opportunity Commission is investigating.
Hoffmann’s firm, Chicago-based executive recruiter DHR International, launched a takeover bid for New York-based CTPartners on Wednesday. The firm offered $61 million in cash, or $7 a share, according to the New York Post. DHR is the sixth largest executive search firm in the country with $155 million in revenue in fiscal year 2013, according to trade newsletter Executive Search Review, just ahead of CTPartners, which posted $91 million.
The two businesses complement each other well, Hoffmann said. The firm’s financial services practice accounts for about 30 percent of its business, with another 14 to 16 percent coming from professional services. DHR wants to grow in both of those areas, expanding beyond its current strengths in the advanced technology and consumer goods industries, as well as searches for diverse hires and board, CEO and chief financial officer positions.
“It’s no secret that they’ve had issues with their management lately,” Hoffmann said. “But by and large, we think the core of the business remains intact … and this would get us where want to be (with financial and professional services) a lot sooner.”
‘A GREAT LIFT GLOBALLY’
Moreover, though DHR has more than 50 offices worldwide, CTPartners has a stronger presence in both Europe and Australia. Scott Scanlon, executive editor of Executive Search Review, said an acquisition would broaden DHR’s geographic reach.
“The deal gives DHR really great lift globally because that’s the one thing they don’t have,” he said. “It’s important for search firms to have a footprint that matches their multinational client base.”
But Scanlon said first DHR must clear two hurdles, the first being Sullivan, who owns about 16 percent of CT Partners. Both Hoffmann and his father, DHR chairman David Hoffmann, have made it clear he’ll be fired if the takeover succeeds. The board also may balk at the price, given that CTPartners was trading at $18.50 a share before the allegations of misconduct were reported.
“A lot of people feel that’s too low an offer,” he said.
In a press release, CTPartners confirmed it had received the offer and the board would consider it. A spokeswoman for CTPartners declined to answer questions related to the takeover bid.
Crain’s Chicago Business, by Claire Bushey