Heidrick & Struggles Signs Definitive Agreement to Acquire Substantially All of the Assets of Highland Partners' Executive Searc
September 18 2006 - 7:00PM
PR Newswire (US)
CHICAGO, Sept. 18 /PRNewswire-FirstCall/ -- Heidrick &
Struggles International, Inc. (NASDAQ:HSII), the world's premier
executive search and leadership consulting firm, today announced
the signing of a definitive agreement to acquire substantially all
of the assets of Highland Partners, a leading retained executive
search boutique and a division of Hudson Highland Group, Inc.
(NASDAQ:HHGP). "The acquisition of Highland Partners, with
annualized revenue in excess of $55 million, is a highly strategic
fit for Heidrick & Struggles," said Kevin Kelly, Chief
Executive Officer of Heidrick & Struggles. "The addition of
Highland Partners enhances our scale and competitive position in
the US, UK, Canada and Australia. It also provides additional
expertise in new areas of the financial services sector,
significantly adds to our Life Sciences industry group practice and
allows us to scale our business more quickly in order to maximize
the operating leverage inherent in our business model. In addition,
we see a number of synergies in combining the businesses that will
provide further upside to our ability to bring value to
shareholders." Heidrick & Struggles will acquire Highland
Partners' business through an asset purchase funded from existing
cash for $36.6 million in initial consideration to Hudson Highland
Group. Hudson Highland Group will also be eligible to receive
additional payments through 2008 based on certain performance
metrics of the acquired business, which could increase the total
purchase price to a maximum of $51.6 million. The acquisition is
expected to close within 30 days, subject to a minimum number of
Highland Partners consultants agreeing to join Heidrick &
Struggles as well as other customary closing conditions. No
regulatory approvals are required. Following closing, Highland
Partners will be integrated into Heidrick & Struggles'
operations. Not including the effect of this acquisition, Heidrick
& Struggles reiterates its 2006 annual guidance for net revenue
of between $445 million and $465 million, with a full-year
operating margin, excluding any changes to estimates in
restructuring reserves, of approximately 12 percent. The Company
believes that this transaction will be slightly dilutive to
earnings and cash flow for the full year 2006, but is expected to
be accretive to earnings in 2007. The Company plans to update its
2006 annual guidance for net revenue and operating margin to
reflect the acquisition when it releases financial results for its
third quarter ended September 30, 2006, currently scheduled for
October 31, 2006. "This is a rare opportunity to add a leading
retained executive search business to our operations, and we
believe that clients, employees and shareholders all stand to
benefit," said Kelly. "The addition of Highland Partners' talent,
as we welcome some of this industry's finest search consultants to
our firm, will allow us to expand service offerings to both of our
client lists. Of particular importance is our commitment to
providing Highland Partners' clients with a seamless transition,
maintaining the quality of counsel, level of trust and client
service they have come to expect. Our employees will have the
opportunity to work for one of the largest retained search firms in
the world. And finally, we believe that the revenue generating
opportunities resulting from this transaction, combined with our
financial discipline and continued focus on improving operating
margins, increase our prospects for success and value creation."
About Heidrick & Struggles International, Inc. Heidrick &
Struggles International, Inc. is the world's premier provider of
senior-level executive search and leadership consulting services,
including talent management, board building, executive on-boarding
and M&A effectiveness. For more than 50 years, we have focused
on quality service and built strong leadership teams through our
relationships with clients and individuals worldwide. Today,
Heidrick & Struggles leadership experts operate from principal
business centers in North America, Latin America, Europe and Asia
Pacific. For more information about Heidrick & Struggles,
please visit http://www.heidrick.com/ . About Highland Partners
Highland Partners is a leading global retained executive search
business, specializing in recruiting at the executive level,
including board directors. The firm is organized along both
industry and geographic lines, allowing it to offer clients
exclusive access to an international talent base. Highland Partners
is a division of Hudson Highland Group, Inc., a leading
professional staffing, retained executive search and talent
management solutions provider. More information about Hudson
Highland Group can be found at http://www.hudsonhighlandgroup.com/
. Forward-Looking Statements This press release contains
forward-looking statements. The forward-looking statements are
based on current expectations, estimates, forecasts and projections
about the industry in which we operate and management's beliefs and
assumptions. Forward-looking statements may be identified by the
use of words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," "projects," "forecasts," and
similar expressions. Forward-looking statements are not guarantees
of future performance and involve certain known and unknown risks,
uncertainties and assumptions that are difficult to predict. Actual
outcomes and results may differ materially from what is expressed,
forecasted or implied in the forward-looking statements. Factors
that may affect the outcome of the forward-looking statements
include, among other things: our ability to attract and retain
qualified executive search consultants; the condition of the
economies in the United States, Europe, or elsewhere; social or
political instability in markets where we operate; the impact of
foreign currency exchange rate fluctuations; price competition; the
ability to forecast, on a quarterly basis, variable compensation
accruals that ultimately are determined based on the achievement of
annual results; an inability to achieve the planned cost savings
from our cost-reduction initiatives; an inability to sublease or
assign unused office space; our ability to realize our tax loss
carryforwards; the timing of any deferred tax asset valuation
allowance reversals; the mix of profit and loss by country; an
impairment of our goodwill and other intangible assets; and delays
in the development and/or implementation of new technology and
systems. Our reports filed with the U.S. Securities and Exchange
Commission also include information on factors that may affect the
outcome of forward-looking statements. We undertake no obligation
to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise. DATASOURCE:
Heidrick & Struggles International, Inc. CONTACT: Investors
& Analysts, Julie Creed, VP Investor Relations of Heidrick
& Struggles International, Inc., +1-312-496-1774, or , or
Media, Eric Sodorff, Director Communications of Heidrick &
Struggles International, Inc., +1-312-496-1613, or , or Joe Poulos
of Edelman, +1-312-240-2719, or Web site: http://www.heidrick.com/
http://www.hudsonhighlandgroup.com/
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