December 19, 2017 – In three transactions, talent solutions company Hudson Global Inc. has entered into definitive purchase agreements with strategic buyers to sell its recruitment and talent management operations in Europe and Asia Pacific.
Hudson intends to focus on its growing global recruitment process outsourcing (RPO) business going forward.
Under the terms of the agreements, the company will receive estimated proceeds of $41.2 million in cash, subject to adjustment.
“We are excited to focus on the RPO business going forward and pleased to have reached these agreements for the sale of our recruitment and talent management businesses,” said Stephen Nolan, CEO at Hudson. “This decision is a result of a lengthy and thorough review of our strategic alternatives and our desire to focus on the growing RPO business.”
Summary of the Deals
Value Plus NV, led by Hudson Benelux CEO Ivan De Witte, is purchasing Hudson’s recruitment and talent management operations in Belgium, the Netherlands and Luxembourg for $24.7 million in estimated net proceeds. The business was established by Mr. De Witte in 1982 and has a team of 250 people including consultants, researchers, R&D and support staff.
Morgan Philips Group SA will acquire Hudson’s recruitment and talent management operations in the rest of Europe for $10.5 million in estimated net proceeds. The proposed deal covers Hudson Global operations in the U.K., France, Spain and Poland as well as a network of franchise operations in Denmark, Sweden, Norway, Czech Republic, Ukraine and Slovakia. Established in 2013, Morgan Philips Group has offices in the U.S., Europe, Latin America, the Middle East and Asia. It provides executive search, permanent and temporary recruitment, interim management and talent management. The acquisition will create a combined business with a turnover of 130 million euros with 600 employees in 20 countries, according to industry sources.
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Apache Group Holdings will obtain of Hudson’s recruitment and talent management operations in Asia Pacific. Apache is led by current Hudson Asia Pacific CEO Mark Steyn. Apache will pay $6 million in estimated net proceeds and assume the company’s short-term debt in Asia Pacific. Apache has more than 675 employees across 16 offices in five countries. The business will retain the Hudson brand locally to capitalize on a 30-year presence in Australia, more than 26 years in New Zealand and 17 years in Asia.
The transactions are expected to close in the first half of next year, subject to the approval of the majority of the outstanding shares of Hudson and satisfaction of customary closing conditions, said the company. The board of directors of Hudson has unanimously approved the definitive agreements for the proposed sales and will recommend the approval of sales of substantially all of Hudson’s assets to Hudson’s shareholders. None of these transactions are contingent on any other transaction in order to close.
Until the close of the sale, all of Hudson’s operations, including RPO, recruitment and talent management, will continue to operate as they do today, said Hudson.
“We believe these transactions are in the best interest of all stakeholders and believe these transactions will allow each of our business lines to thrive with more resources, investment and dedicated management than in our existing structure,” said Mr. Nolan. “I believe our teams will continue to have success under the leadership of Ivan De Witte in Belgium, Morgan Philips in Europe and Mark Steyn in Asia Pacific.”
Recent Shareholder Activity
While it remains to be seen how shareholders will react, Hudson’s stock has seen a wave of activity in recent months. Zacks Investment Research recently raised shares of Hudson Global from a “strong sell” rating to a “hold” rating. In addition, major shareholder Sagard Capital Partners, L.P. sold 1.1 million shares of the stock in a recent transaction. The shares were sold at an average price of $1.80, for a total value of $1.98 million. The sale was disclosed in a filing with the Securities & Exchange Commission. Currently, just 12.2 percent of the stock is owned by company insiders.
Several institutional investors have recently added to or reduced their stakes in Hudson. Renaissance Technologies boosted its position in the company by 14.8 percent since the start of the year. Renaissance now owns 248,096 shares, valued at $588,000 after buying an additional 31,996 shares during the period. Geode Capital Management raised its holdings in Hudson Global by 2.3 percent. Geode now owns 95,731 shares, valued at $226,000 after buying an additional 2,119 shares during the period. And Frontier Investment Management Co. increased its position by .8 percent in the second quarter. Frontier now owns 521,901 shares valued at $1,028,000 after buying an additional 4,269 shares during the period. Institutional investors currently own just under 75 percent of the company’s stock.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media