Time & Attendance
By Michelle Rafter
Sep. 25, 2012
A multibillion dollar Japanese human resources and information technology conglomerate made its highest profile U.S. acquisition to date, announcing Sept. 25 it will buy top jobs website Indeed for an undisclosed sum in a deal that could close as soon as next month.
Indeed’s purchase by Recruit Co. provides the Austin-based company with the capital it needs to continue expanding outside the United States, especially in Asia. While half of Indeed’s website traffic comes from non-U.S. job seekers, less than half its advertising revenue is international, says Anne Murguia, the company’s senior director of corporate marketing. “We’ve just scratched the surface in terms of monetizing that traffic,” Murguia says.
Widely regarded as an online jobs site industry leader, Indeed has seen revenue double three years in a row. The company has operated in the black since 2007, Murguia says. She declined to disclose current revenue or earnings.
The acquisition quiets rumors that Indeed.com had been pursuing an initial public offering to raise funds for expansion, following the path of HR tech companies such as Workday and Cornerstone OnDemand that have gone public in recent months or are expected to in the near future.
Opting to become part of a deep-pocketed, multinational company frees Indeed from the worries that come with operating as a public company, says job board industry analyst Jeff Dickey-Chasins. “It’s a more immediate payoff for those who’ve invested,” he says. “The IPO business is always chancy.”
One of those investors, the New York Times, is selling its interest in Indeed as part of the acquisition and will record an after-tax gain of about $100 million because of it, according to a Reuters report.
The deal is expected to close early in the fourth quarter. Once it does, Indeed will operate as an independent subsidiary. Co-founders Rony Kahan and Paul Forster will stay with the company, however, Murguia declined to say whether they have signed formal employment agreements to that effect.
Indeed may be the most high-profile American HR company Recruit Co. has acquired, but it’s not the first. In December 2011, the Japanese company bought privately held, U.S.-based staffing firm Advantage Resourcing America, Inc., and a British affiliate for $410 million from private equity firm Cerberus Capital Management LP.
The deal is the latest in a string of American HR tech vendor acquisitions in the past 12 months that has seen Oracle buy Taleo, SAP buy SuccessFactors and IBM buy talent management software provider Kenexa Corp. for $1.3 billion.
Indeed’s purchase comes at a time when the fate of other major jobs sites is evolving. Monster Worldwide Inc. has entertained several offers since chairman Sal Iannuzzi put the other jobs site market leader up for sale in spring. Earlier this month, CareerBuilder, partly owned by newspaper giant Gannett Co., bought an employment data and labor market analysis company as a way into the HR “big data” business.
Michelle V. Rafter is a Workforce contributing editor. Comment below or email firstname.lastname@example.org.
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