Heidrick & Struggles Completes Acquisition of Highland Partners' Executive Search Operations
October 02 2006 - 5:30PM
PR Newswire (US)
100 Percent of Consultants Offered Employment Accept CHICAGO, Oct.
2 /PRNewswire-FirstCall/ -- Heidrick & Struggles International,
Inc. (NASDAQ:HSII), the world's premier executive search and
leadership consulting firm, today announced it has completed the
acquisition of substantially all of the assets of Highland
Partners, a leading retained executive search operation and
formerly a division of Hudson Highland Group, Inc. (NASDAQ:HHGP).
All 48 of the Highland Partners consultants who were offered
employment by Heidrick & Struggles have accepted. Under the
terms of the definitive agreement announced on September 18, 2006,
Heidrick & Struggles paid $36.6 million in cash to Hudson
Highland Group. "We are pleased to welcome the Highland Partners
consultants and their associates to the Heidrick & Struggles
team. These talented individuals enhance our scale and competitive
positioning in the US, Canada, the UK, and Australia, as well as in
many of our industry practice groups," said Kevin Kelly, Chief
Executive Officer of Heidrick & Struggles. "This acquisition
benefits all of our clients, enabling us to expand the service
offerings and scope of our combined businesses. We are confident
that our new consultants will be able to quickly realize revenue
and productivity increases from capitalizing on our brand, by
working closely with our practice groups, and by utilizing our
support capabilities, such as our Knowledge Management Center in
India." In addition to the payment made today, Hudson Highland
Group will be eligible to receive additional earnout payments of up
to $15 million based on the acquired consultants achieving certain
revenue metrics in 2007 and 2008. The total purchase price,
including the $36.6 million paid at closing and the 2007 and 2008
earnout payments, will not exceed $51.6 million. Kelly added, "We
will be extremely disciplined in our efforts to quickly capture
expected cost synergies related to consolidating our real estate,
administrative and technology infrastructure, which, when combined
with expected revenue opportunities, we are confident will drive
profitable growth." Heidrick & Struggles believes that this
transaction will be slightly dilutive to earnings and cash flow for
the full year 2006, due to integration costs and the amortization
of intangible assets, but it is expected to be accretive to
earnings in 2007. The company will 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, scheduled for October 31, 2006. 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/ . Safe Harbor Statement 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; delays or
difficulties in integrating the Highland Partners search
operations; 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,
+1-312-496-1774, , or Media, Eric Sodorff, Director,
Communications, +1-312-496-1613, , or Joe Poulos, VP of Edelman,
+1-312-240-2719, Web site: http://www.heidrick.com/
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