1. Your Online Recruitment Business for Investment or Acquisition
Preparing
Your Online Recruitment Business
for Investment or Acquisition
Getting Bigger or Getting Out By 2017
Randy Mehl
Partner Baird Capital
2014 IAEWS Spring Congress

2. Introduction
2014 IAEWS Spring Congress

3. Robert W. Baird & Co. 2014 IAEWS Spring Congress
Helping clients achieve their asset management, wealth management, capital markets and private equity goals for 95 years
1919 Founded in Milwaukee
$100 billion Assets under management*
No. 1 “Most Important” provider of small-cap and mid-cap research**
More than 2,700 Employees
100+ Office locations on three continents***
11 Number of consecutive years Baird has been recognized as one of the FORTUNE 100 Best Companies to Work For®
A Comprehensive Financial Services Firm
Private Equity
Capital Markets
Europe
United States
Asia
Private Wealth Management
Asset Management
*As of May 14, 3013.
**Greenwich Associates U.S. Equity Investors – Small/Mid-Cap Funds, April Surveys conducted with 94 U.S. small-cap and mid-cap fund managers Rankings based on top 10 research firms in survey.
***Baird and its operating affiliates have offices in the United States, Europe and Asia. Robert W. Baird Ltd. and Baird Capital Partners Europe are authorized and regulated in the UK by the Financial Conduct Authority.
2014 IAEWS Spring Congress

4. Baird and Online Recruitment
A leading capital markets firm in the Human Capital and Recruitment sector
Baird Capital
Investment Banking
Equity Research
Conferences
Solid track record of successful investments in the HCM and Recruitment areas
Over 50 dedicated investment bankers in Business and Technology Services, including HCM
27 years of research excellence in the Human Capital sector
Longest standing investor conferences addressing HCM and Recruitment
2014 IAEWS Spring Congress

5. Baird Capital – Global Platform
US Private Equity
Headquartered in Chicago
15 Investment professionals
Raised and managed $880 million
China Growth Equity
Headquartered in Shanghai
Seven investment professionals
$72 million under management
Global Sourcing Platform
Global Portfolio Operations
Global Idea Generation
US Venture Capital
Headquartered in Chicago
5 Investment professionals
Raised and managed $272 million
UK Private Equity
Headquartered in London
Four investment professionals
Raised and managed £860 million
2014 IAEWS Spring Congress

6. Agenda 2014 IAEWS Spring Congress Online Recruitment M&A Activity
Preparing for a Sale or Investment – Critical Questions
Exit Planning – The Long-Term Plan
Exit Planning – The Short-Term Plan
Closing the Deal
2014 IAEWS Spring Congress

7. Investment Activity in Online Recruitment
2014 IAEWS Spring Congress

8. Online Recruitment Activity
Acquired
Acquired
Acquired
Received $70M Investment
Acquired By
Acquired
Oct / Nov 2013
September 2012
February 2014
April 2014
June 2012
May 2012
Acquired
Initial Public Offering
Acquired
Acquired
Received $10M Investment
Acquired
February 2014
November 2013
February 2014
April 2012
October 2013
August 2010
Acquired
Acquired
Acquired
Acquired
Acquired
Acquired
March 2014
December 2009
Aug/Sep 2011
December 2011
April 2013
April 2014
2014 IAEWS Spring Congress

9. Online Recruitment – Why So Active?
Attractive market characteristics
As economic conditions improve, talent acquisition becomes costly
Workforce complexity increasing – part-time, contingent and freelance workforce
Disruption factors – aggregators, social, mobile
Big guys want to stay relevant
Access to the passive candidate e.g., go vertical
Address the “hot” areas of social, mobile
Empower the employers e.g., data analytics
Lots of capital available
2014 IAEWS Spring Congress

10. Lots of Capital Available
Improving economic conditions + easy money policy = More M&A !
Investors are sitting on over $1 trillion in dry powder
Credit markets are supportive of increased leverage and offering cheaper interest
Corporate balance sheets flush with cash
2014 IAEWS Spring Congress

11. Preparing For Exit
2014 IAEWS Spring Congress

12. Preparing for Exit – Critical Questions
What are your objectives?
Retirement?
Portfolio diversification?
Financial backing to grow?
Strike while the iron is hot?
Stop the bleeding?
What is your timeframe?
How realistic are your expectations?
2014 IAEWS Spring Congress

13. Exit Planning – The Long-Term Plan
Goal is to maximize value!
Private Equity buyers value a standalone business…
Addressing the most relevant areas of the market
Persistent revenue streams e.g., subscription pricing, recurring client demand
Good margin and cash flow characteristics
Scalable business model
Runway
Strategic buyers value…
Whatever they happen to need to grow at that point (Offense!)
Less competition (Defense!)
2014 IAEWS Spring Congress

14. Exit Planning – The Long-Term Plan
Ideas for “Investment”
Fill out the management team
“Fireside Chats” with strategic buyers, industry experts
Position the business to address “future” growth areas e.g., vertical focus, recruiter analytics tools
Formalize key functions (BD, marketing, training, HR, Accounting)
Consider an audit
New business capacity!
2014 IAEWS Spring Congress

15. Exit Planning – The Short-Term Plan
Goal is to close the transaction!
Define your objective and stay focused on it!
Identify the most likely buyer groups
Engage good advisors – intermediary, lawyer, accountant
Prepare for some pain
Process typically lasts between 60 days to a full year – big distraction
Transaction typically costs a small-to-medium sized seller between $300k-$1m
2014 IAEWS Spring Congress

16. Today’s Buyers – PE versus Strategic
2014 IAEWS Spring Congress

17. Sale Process Timeline
2014 IAEWS Spring Congress

18. Closing Checklist
2014 IAEWS Spring Congress

19. Exit Planning – Close the Transaction
Do it right the first time!
2014 IAEWS Spring Congress

20. Getting Bigger or Getting Out
Preparing Your Online Recruitment Business for Investment or Acquisition
Getting Bigger or Getting Out
Randy Mehl
Baird Capital
2014
IAEWS Spring Congress