New State Capital Partners Takes Equity Stake in Klein Hersh
November 18, 2020 – New State Capital Partners, based in Larchmont, NY, has taken an equity investment stake in Horsham, PA-based Klein Hersh International, an executive search firm focused on the life sciences and healthcare industries.
New State was advised on the transaction by Morgan Lewis (legal), Duff & Phelps (financial), L.E.K. Consulting (industry), and Citizens Bank (M&A advisory). Financial terms of the transaction are not being disclosed.
“It’s no secret that life sciences and healthcare are booming fields with significant growth pathways for the foreseeable future,” said Shaun Vasavada, vice president at New State. “Businesses in those sectors need experienced leaders with technical expertise to build successful organizations, and Klein Hersh has proven to be a strategic partner to clients seeking world-class talent.”
The pandemic has wreaked havoc on many executive search firms, according to industry market intelligence reports from Hunt Scanlon Media, based in Greenwich, Conn. “But one bright spot has been life sciences,” said the firm in a statement. According to the latest data published by Hunt Scanlon, Klein Hersh reported a 30 percent growth rate last year, with $52 million in revenue among 37 consultants based in one office. Klein Hersh ranked No. 12 among the 50 largest recruiters on the Hunt Scanlon roster of leading firms.
“Executive recruiting leaders are increasingly turning to private equity funding sources to help them grow and expand, but also to safeguard their firms in times like the one we find ourselves in now,” said CEO Scott A. Scanlon, who also oversees Hunt Scanlon Ventures, an M&A advisory business which sits at the nexus of buyer, seller, private equity funding source, and client. “This represents a solid investment for New State Capital Partners and it is a platform they will be able to expand upon and extend in several directions in the coming years.” Growth areas include interim staffing – which has witnessed a resurgence in the life sciences sector during the pandemic, said Mr. Scanlon – as well as international opportunities which the search firm has had little exposure to. “As the pandemic reminds us, life sciences is a global endeavor and the need for talent will be explosive.”
The search firm’s senior executives – Jason Hersh, Jesse Klein, and Josh Albert – will remain as the leadership team at the firm and will retain a substantial ownership stake.
“It was important for us to find a financial partner who understood the priorities of owner-managed companies and could help us attain next-level growth,” said Mr. Hersh, who serves as CEO of the firm. “We feel fortunate to be working with New State, whose financial and operational resources will guide our expansion and reinforce the culture that has contributed to our success.”
Private Equity Firm Takes Majority Stake in Bullhorn
Stone Point Capital, a private equity firm based in Greenwich, Conn., has taken a majority stake in Bullhorn, a provider of software to recruiting firms, to power the next phase of the company’s growth. The hope is the investment will speed up the staffing and recruiting industry’s embrace of digital transformation. Terms of the transaction were not announced. Stone Point Capital will have a representative on the company’s board. Insight Partners and Genstar will remain investors in the Bullhorn business.
“We are very excited to be working with the team at Stone Point as we enter the next phase of Bullhorn’s growth,” said Art Papas, founder and CEO of Bullhorn. “We have a tremendous opportunity to help the global staffing industry execute on their digital transformation strategies, and Stone Point’s experience and industry expertise will be invaluable as we grow the company to the next level. We’re also happy that Insight and Genstar will remain investors, as they have been integral to helping us more than double our revenue over the last three years.”
“It has been extremely gratifying to build this business as it has developed into the go-to executive search firm in the life sciences and healthcare industry,” said Mr. Klein, who co-founded the firm with his wife, Fern. “We are pleased that New State will work with our outstanding team to build on that legacy and be thoughtful stewards of our future.” Prior to founding the firm, Mr. Klein was an entrepreneur who built two retail businesses that were subsequently acquired by public companies. He also has served on the executive leadership team of three public companies.
Established in 1998, Klein Hersh works with global pharmaceutical, biotech and healthcare companies as well as operating businesses of PE and VC-backed investments.
Among the firm’s clients are a Who’s Who list of biopharma, biotechnology, life sciences, healthcare, therapeutics, and venture capital & private equity concerns, including CVS Health, Andreesen Horowitz, Elevate Bio, KKR, Novo Holdings, Talaris Therapeutics, Atlas Venture, Veradigm, Versant, Cognizant, Francisco Partners, Madrigal Pharmaceuticals, Adicet Bio, Arvinas, Third Rock, Riverside, Signet Healthcare Partners, Black Diamond Therapeutics, Clear Choice, Limelight Bio, and Rhythm Pharmaceuticals, among a long list of other leaders across the space.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media
