October 6, 2015 – Heidrick & Struggles has acquired Co Company, a London-based advisory boutique specializing in leadership services that accelerate organizational performance. The firm will be merged into Heidrick’s leadership consulting business.
The all-cash deal terms include an initial payment of $10.6 million at closing and an earn-out structure designed to provide aggregate consideration totaling $15 million to $18 million if Co Company achieves certain revenue and EBITDA margin milestones. Co Company, led by Colin Price, advises clients on organizational performance, including team dynamics, performance management & leadership assessment, development and transformation.
“This acquisition is an important marker in the further development of our full complement of leadership advisory services to help our clients achieve transformative results,” said Tracy R. Wolstencroft, Heidrick’s president and CEO. “The addition of Co Company provides a premium leadership and organizational development capability with tools that can scale globally. It will enhance our ability to work with senior executives around the world to accelerate individual, team and business performance.”
Mr. Price, who will be based in London, will lead Heidrick’s global leadership consulting practice as executive vice president. He will also serve as a member of the firm’s management committee. Previously, he was senior leadership advisor and served as a director at McKinsey & Co. and a partner at Price Waterhouse Management Consultants.
“Colin has developed a strategic advisory firm combining data analytics with insightful, professional judgment to help teams succeed in unpredictable and rapidly changing operating environments,” Mr. Wolstencroft continued. “The team will further develop and deploy this model at Heidrick & Struggles, leading the expansion of our leadership consulting services globally with a relentless client focus.”
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Three other members of Co Company’s senior leadership team will join Heidrick’s leadership consulting practice as partners:
TA Mitchell has 20 years of experience advising clients in change management, blended with a deep process and performance focus. With over 15 years of experience of consulting in Europe and the U.S., she co-founded Co Company in 2007 and prior to that she ran her own consulting business for several years.
Cathy Powell has expertise in organizational behavior and change management, including leadership assessment, talent management, executive coaching and development. Before joining Co Company she also ran her own firm, Cathy Powell Consulting Ltd.
Sharon Toye is a psychologist, coach and psychotherapist with expertise in the development of leaders, teams and organizations to enhance performance and health. She has over 15 years of experience consulting in Europe and the U.S. and was formerly a director with Sharon Toye Consulting Ltd. before joining Co Company.
“With a brand that garners respect from transformational leaders, Heidrick & Struggles has a global platform that will position us to work with C-suite executives at many of the world’s top companies to help them accelerate leader, team and organizational performance,” said Mr. Price.
In July, Heidrick increased its bank credit facilities to give the company additional investment options. “The increase and extension of our credit facility, combined with our balance sheet and capital structure, provide Heidrick with total financial flexibility as we continue to invest in our business and pursue our growth strategy,” said Heidrick CFO Richard W. Pehlke at the time.
Heidrick’s acquisition follows closely on the heels of rival Korn Ferry’s massive deal to acquire Hay Group in an effort to expand its human capital consulting business. With a market cap that has ballooned to $1.75 billion, Korn Ferry agreed to pay nearly a half billion dollars for Hay, privately held for more than 70 years, in order to tap into what it sees as a new growth area, and a future direction, for the company.
“Korn Ferry picked up an army of 3,000 employees in 50 countries with the Hay Group deal,” said Scott A. Scanlon, CEO of Hunt Scanlon Media, who has tracked developments in the senior level recruiting business for 25 years.
Hay Group, said Mr. Scanlon, is a well-known leader in people strategy and organizational performance. He said the firm has a portfolio of intellectual property, including several of the world’s most comprehensive management databases, that Korn Ferry will now use as a platform to launch a fully integrated human capital management business.
“Being able to not just recruit talent — but to benchmark salaries and performance — is what Korn Ferry is betting on,” said Mr. Scanlon. “Integrating all these moving parts, with recruiting staying in the pivot position at least for now, is what we’re seeing driving these deals.”
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media