CTPartners Shares Dive 17 Percent; Market Cap Stands At $13 Million

June 18, 2015 – Shares in executive search firm CTParnters sank another 17 percent yesterday, dropping to a new low of $1.51. The once high-flying executive recruiter traded at $23.75 just a year ago. Volume was relatively light with 469,000 shares trading hands, about double the typical trading volume average for the company. CTPartners, one of only a few publicly-traded search firms in the U.S., has dropped 80 percent in value in the last year. The company’s downward spiral began earlier this year when the tabloid newspaper, The New York Post, broke a story that alleged accusations of sexual discrimination bias at the company and a reported investigation by the EEOC into discriminatory actions made by some members of CTPartners’ senior management team, including its chief executive, Brian M. Sullivan. The value of shares in the company has deteriorated ever since.

CTPartners has seen a massive wave of departures from its ranks, including a large percentage of its management team, since January. Many of its top revenue producers have gone to rivals, including Korn Ferry, DHR International, Russell Reynolds Associates, Heidrick & Struggles, Caldwell Partners, Odgers Berndtson, Barrett Partners and Sheffield Haworth. A number of other executive recruiters from the company are in talks with competitors.

CTPartners was approached by DHR several months ago, which expressed serious interest in acquiring the full equity of the company. CTPartners rebuffed those overtures. CTPartners’ board representatives said several weeks ago that they would, in fact, explore the DHR acquisition offer as the company’s consultant ranks dwindled – but those talks have shown no clear outcome. A decision by Chicago-based DHR could come by the end of June.

CTPartners has seen its market capitalization decline considerably since the end of last year, and that trend continues. According to the latest valuations by Hunt Scanlon Media, the dollar value of the company’s outstanding shares is about $13.3 million. The two other publicly-traded executive search companies have lofty market capitalizations by comparison: Korn Ferry, the nation’s No. 1 talent provider, has a current market cap of $1.750 billion, while CEO recruiter and culture shaping advisor, Heidrick & Struggles, has a market cap of $464 million.

Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media

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14 Comments on "CTPartners Shares Dive 17 Percent; Market Cap Stands At $13 Million"

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Anonymous
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Hunt Scanlon team, if you may divulge, what part of the diligence process would you say we are in from what you have heard: still in the early stage, in the thick of it, or nearing the end?

Anonymous
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How does the Europe/Asia parts of CTP look? From what I read, that was a big appeal to DHR as they are mostly domestic (and a few failed attempts expanding internationally). To me, this seems like a no-brainer, even with all that has happened recently. Paying a discount to remove a competitor (one that will last if the deal does not go through) seems simple to me (granted I do not know how the legal aspect is shaping). I do not believe DHR was naive to think that 100% of consultants would have stayed through the acquisition, and was probably… Read more »
Anonymous
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The longer this potential deal takes to happen, or not, the more any of the high value CTP consultants that are still with the firm, as measured by the votes of his/her clients, will be given opportunities in other firms. So far, most of the higher revenue producers that have left have joined Heidrick or KFI, with very small numbers joining other firms. It is interesting, that unlike when CTP blew up back in 2000/2001, many of the Consultants/VP’s that left had the confidence to set up his/her own shop, and there are now some “mini CTP’s”, like ON Search… Read more »
Anonymous
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The comment above gives an interesting point. Bad PR can ruin a company. Just look at CTP…

Anonymous
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I agree with the above comments but for a different reason. Through this process DHR has received a lot of bad press. One would think they would want to speed the process up to remove themselves from the spotlight (but not to rush of course). Do the deal or don’t, but if they are holding out the process to shaft CTP more then word will resonate through the industry and add to the mountain of negativity that has formed. Bad PR can be read by DHR employees, CTP employees, and worse, potential clients. All I know is if a deal… Read more »
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