DHR and CTPartners Begin Takeover Talks As Lifelines Dry Up

May 20, 2015 – CTPartners, No. 7 on Hunt Scanlon’s top Americas search firm rankings, has announced that pursuant to its previously announced strategic alternatives process, the company has received a non-binding indication of interest from it’s top 10 rival, DHR International, to be acquired.

The special committee of the company’s board of directors, which was formed to evaluate CTPartners strategic alternatives, has agreed to negotiate exclusively with DHR for a period of 20 days while a due diligence process takes place. Pricing and other terms have not been disclosed, but the indicated preliminary price range set forth in the indication of interest submitted by DHR is below the $7 per share DHR previously proposed to pay in a February 5, 2015 letter to the CTP board of directors.

What finally drove CTPartners to the table was disclosed in the company’s Form 10-Q for the quarter ended March 31, 2015, filed yesterday, that it had received a limited duration waiver from its lenders relating to CTP’s non-compliance with a covenant included in both its term credit facility and note purchase agreement requiring that revenue generated by departing search executives not exceed specified levels. To date, CTPartners has lost some 30 top producing consultants, a third of them at the vice chairman level, with billings collectively in a range exceeding $50 million-plus, according to departing executives.

The lenders have agreed to forbear from enforcing their remedies in connection with this non-compliance as long as certain milestones in connection with the proposed sale of the company are met. The credit facility has been reduced from $20 million to $15.5 million and the interest rate increased by 25 basis points, resulting in a current rate of approximately 3.18% per annum.

Importantly, the notes purchaser is not expected to purchase a second tranche of $6.25 million principal amount of notes, which had been scheduled to occur after June 30. “That sealed the fate of CTPartners,” said Scott A. Scanlon, Hunt Scanlon Media founding chairman, “and it sealed the deal for DHR.”

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

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4 Comments on "DHR and CTPartners Begin Takeover Talks As Lifelines Dry Up"

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DHR has made a great and profitable business from low-producing partners (historically). They have made valiant attempts to bring in higher-level partners and I’m sure this is a blend between a headcount play (where they can create ROI based on their model) and hope they will retain a subset of higher tier players. This said, it is a 2nd tier brand where CT was not. Questions about what is left and esp what will be left once those good ones left realize independent survival is now impossible and the only option is DHR or… leave!


With CTPartners losing many of their top producers and some $50M in revenues, why does DHR want to acquire the leftovers? This is a relationship based business and at the retained search level, brand is everything. DHR’s brand is poor to the say the least. Unless DHR is acquiring a headcount play, I don’t see the sex appeal in acquiring average or low producers that will increase your overhead with minimal ROI.

It is actually amazing that after CTP nearly collapsed back in 2000/2001 having leadership that never heard of the words honesty and integrity, that the firm was able to convince clients to not only fund it again, but to fund it to be larger in size and footprint than the first time around. All more amazing with one of its CEO’s ultimately going to jail, his half-brother remaining with the firm, several other of the most abusive partners from a billing perspective remain with the firm, and then a series of continued botches in naming future firm leaders. The biggest… Read more »

What an undignified, but predictable, ending. Impressive reporting Hunt Scanlon. You’ve kept the industry well-informed since this train wreck started last December. Why don’t you now tell us what Geoff Hoffmann has in mind once he takes over CTPartners next month.