HireQuest Acquires MRINetwork’s 252 Franchise Offices

November 28, 2022 – Acquisitions and consolidations continue to make news in the recruiting industry, with a number of notable purchases in recent months. The latest: HireQuest Inc., a NASDAQ-traded national franchisor of on-demand, temporary and commercial staffing services, has entered into a definitive agreement to acquire certain assets of MRINetwork, a global executive recruiting network headquartered in Delray Beach, FL, for approximately $13.5 million before working capital adjustments. The assets include MRI’s 232 franchise offices in the U.S. and internationally, which generated approximately $283 million in systemwide sales and standalone adjusted EBITDA of $1.9 million for the trailing 12-month period ended Sept. 30.

“MRI is recognized as one of the top permanent placement executive search and professional staffing networks in the U.S.,” said Rick Hermanns, president and CEO of HireQuest. “The addition of MRI as a franchise offering for executive search provides HireQuest with immediate scale in the segment and is highly complementary with our existing HireQuest direct and Snelling offerings. For more than 50 years, MRI’s franchisees have provided their clients with exemplary service, we are looking forward to providing them with additional tools and support they need to grow that success in the future.”

“I’ve spent over 27 years as an MRI franchisee and became its CEO three years ago with a goal of carrying on the innovation established by our original founder, Alan Schonberg,” said Bert Miller, president and CEO of MRI. “Through this time, we’ve successfully guided the organization through a digital transformation to prepare the business for the future and help our franchisees build real businesses that also happen to be search firms.”

“I’m extremely proud of what we’ve built at MRI, and believe HireQuest will be a perfect partner to further develop our corporate and leadership teams and, most importantly, provide our franchisees with more resources, broader scope, and the ability to strategically scale,” said Mr. Miller. “We believe that becoming part of the HireQuest family is the right pathway to grow MRINetwork and give our franchisees every opportunity to further their success.”

HireQuest will fund this acquisition with cash on hand and its existing line of credit. Completion of this transaction is subject to a number of closing conditions. Subject to such conditions, the transaction is expected to close Dec. 12. During the interim, both HireQuest and MRINetwork offices will remain open for business without interruption.

Richmond, VA-based Transact Capital Securities, LLC, served as financial advisor to MRINetwork.

HireQuest is a nationwide franchisor that provides on-demand labor and commercial staffing solutions in the light industrial, blue-collar and commercial segments of the recruiting industry for HireQuest Direct, HireQuest, Snelling and Link franchised offices across the U.S. Through its national network of over 210 franchisee-owned offices in more than 35 states and Washington, D.C., HireQuest provides employment for more than 60,000 individuals annually that work for thousands of customers in numerous industries including construction, light industrial, manufacturing, hospitality, clerical, medical, dental, travel, and event services.

Wave of Acquisitions

Earlier this year, HireQuest acquired Northbound Executive Search in New York City. Founded in 2010, Northbound provides executive placement and short-term consultant services primarily to blue chip clients in the financial services industry. The firm generated over $15 million of revenue in 2021. “The acquisition of Northbound continues to build out HireQuest’s offerings in the higher margin executive placement and short-term consultant segments,” said Mr. Hermanns. “The company is a natural fit for our growing family of brands and we are excited that Northbound’s founders, Rachel and Greg Feder, will be staying on to lead Northbound into its next chapter.”

“With this partnership, Northbound has the ability to draw from an organization that will help to fuel our next stage of growth,” said Mr. Feder, managing partner.

“As managing partners of Northbound, we will continue to operate the business on a day-to-day basis and our teams will continue to focus on providing a premium level of service to our clients,” said Ms. Feder.

HireQuest also recently acquired operational assets of The Dubin Group Inc. and Dubin Workforce Solutions Inc., related founder-owned businesses in Philadelphia, Pennsylvania that provide executive placement services and commercial staffing, respectively.

“This acquisition not only expands our HireQuest direct and Snelling offerings in the Northeast, but it also provides us a toehold into higher margin executive placement services in the region,” said Mr. Hermanns. “We are delighted that Kenny Dubin, the founder of these companies, has agreed to stay on to help further develop these offerings.”

In addition, HireQuest acquired the staffing division of dmDickason Personnel Services, a family-owned company based in El Paso, TX. The staffing division has three offices, two in El Paso, TX, and one in Las Cruces, NM, which generated approximately $18 million in revenue in 2021.

Hunt Scanlon Media Launches M&A Advisory Service for Recruiters
These have been sobering days for executive recruiting firms around the globe. Most of them, regardless of size, location, or specialization were caught flat-footed by one of the most sweeping economic crises to ever hit the sector this past year. As a result, the nation’s top search consultants have been resetting expectations and, in the process, setting a new course.

Professional services firms – and executive recruiting outfits in particular – have a long history of finding their way through tough times. Many search firms have used this time to dust off their own continuity and succession plans, or to reconsider that merger or acquisition which was something of a nuisance when times were flush. Others have taken a hard look at their capitalization strategies. This crisis, like no other, has driven many of the most well-known and respected brands in the recruiting business to reassess everything about their businesses, top to bottom.

Behind the scenes, this has been an active period for executive recruitment firms. To meet their advisory needs, Hunt Scanlon Media launched a new set of solutions to assist search firms and talent solutions providers seeking mergers, acquisitions, or funding connections. Founders Scott A. Scanlon and Christopher W. Hunt sit down to discuss Hunt Scanlon Ventures and the state of the executive search industry.

“This acquisition expands our Snelling footprint in west Texas and New Mexico,” said Mr. Hermanns. “dmDickason started in 1965 as one of the earliest Snelling franchises and for over 40 years Don and Martha Dickason have been providing exceptional service to businesses and job candidates in the greater El Paso area. It’s great to be able to acquire a business with such a long history and we’re excited to bring the Snelling name back to region.”

HireQuest also acquired Recruit Media Inc., an HR tech start-up with a next-gen SaaS recruitment platform. The transaction was paid for with cash on hand and a modest revolver draw. Recruit Media enables candidates to create rich multimedia profiles to better differentiate themselves and convey their skills to potential employers. It also streamlines communications with text-based chat as well as in-app video chat. Recruit Media’s technology is multi-platform with a web-based application, as well as native iOS and Android apps, to provide candidates and employers with the flexibility to use the platform in a way that best fits their needs.

“The acquisition of Recruit Media brings us to the forefront of staffing and recruiting technology and enables us to differentiate our value in the eyes of our workforce and clients. Recruiting qualified workers is a pain point for businesses across America,” said Mr. Hermanns. “This platform focuses on reducing this friction point, increasing throughput to our franchisees. Many of the features and solutions of the Recruit Media platform have been on our internal technology road map for a number of years. This acquisition accelerates that road map, saving us years of development, and provides a more robust base to build upon. Technology increasingly influences all aspects of our business and with the acquisition of Recruit Media we enable our franchisees, employees, and clients to interact with one another more efficiently. We’re very excited about the opportunities this creates for our franchisees today and the opportunities it opens up for us in the future.”

“Recruit Media was founded on the basic principle of ‘I am more than a resume,’ that the traditional resume alone does not empower candidates to holistically represent and differentiate themselves,” said Jeff Nussbaum, co-founder and CEO of Recruit Media. We are thrilled that HireQuest will carry that torch forward, expanding upon our shared vision, and are certain that its franchisees, employees and clients will benefit greatly.”

Related: Hunt Scanlon Media Launches M&A Advisory Service for Recruiters

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media