9 external firms advise on Korn Ferry | Hay Group deal
Last week, global recruitment firm Korn Ferry formally completed its acquisition of management and HR consultancy Hay Group, in a deal worth $452 million. Hay Group’s operations have been bundled with Korn Ferry’s Leadership and Talent Consulting advisory business, creating a 7,000 man strong human capital advisor. The deal was advised on by an army of external financial and legal advisory firms, including the likes of Goldman Sachs, Sullivan & Cromwell, Osler, Hoskin & Harcourt and Bank of America Merrill Lynch.
On 24 September Korn Ferry and Hay Group unveiled their merger plans, a move which sent a tidal wave through the worlds of recruitment and HR consulting and creates a global leader in human capital consulting and solutions. “The combination of our two firms brings together nearly 7,000 talented professionals who have a single purpose – helping leaders, organisations and societies succeed by realising the full power and potential of people,” says Korn Ferry Gary Brunison.
The new business has been branded as Hay Group, and is led by Stephen Kaye, who served as CEO of Hay Group since March 2013, and previously held the CFO role for fifteen years. He states that the purchase represents “a historic moment that will reshape the future of work,” adding that the two companies in his view are a perfect match. “We feel this is the perfect combination of two great firms that will be uniquely positioned to help clients achieve their strategic goals and highest aspirations. In Korn Ferry we have found a like-minded partner committed to enabling stellar business performance through people and organisational effectiveness.”
The joining of forces is expected to unlock massive benefits in scale, services, expertise, client base and solutions, as well as cross-selling opportunities at shared accounts. The integration will however also trigger operational efficiencies, which will come at a cost to some locations and employees: a preliminary assessment speaks of synergies of at least $20 million a year that will be realised in real estate costs* and in support functions.
The deal between the two firms was advised on by an army of external advisory firms. Seller Hay Group received financial advice from Goldman Sachs, while legal advisory was provided by Sullivan & Cromwell, Stibbe, Conyers Dill & Pearman, Arendt & Medernach, and Osler, Hoskin & Harcourt. Bank of America Merrill Lynch served as the main financial advisor for Korn Ferry, with law firms Gibson, Dunn & Crutcher and Morrison & Foerster providing legal transaction support.
* Korn Ferry’s 3,900 employees are based in 78 offices in 37 countries, while Hay Group’s professionals operate from 88 offices in 50 countries.
