Has anyone here been privy to a merger or acquisition in the job board market space?
As research director for the Recruiting Group at Kennedy Information, I am the primary author of "M&A Dynamics for Employment Web Sites," a report we're developing in collaboration with the International Association of Employment Web Sites (IAEWS).
Attendees at last month's IAEWS Congress in Orlando, Fla. (which immediately followed Kennedy Information's Recruiting 2007 Conference and Expo at the same convention facility), took in a presentation of our findings and previewed the document's draft version, which became the subject of a discussion elsewhere on this site a few weeks ago.
To our knowledge, nobody has produced a research report such as this one to look specifically at your industry. In compiling the report, we've learned that little in the way of "actuals" (i.e., hard data on actual deals) is available; before presenting in Orlando, we in fact reached out to the private equity community for data on actual transactions in your market space, but to no avail. Since then, we've made inroads with a few folks who might be able to provide this kind of information. The takeaway seems to be that these deals commonly occur under the radar.
Meanwhile, in its draft form the report is already filled with qualitative data from interviews with experts in the field, as well as quantifiable data on actual job board leaders' expectations, activities, and attitudes regarding M&A in their industry.
From all of this, we infer that M&A activity is possibly on the verge of exploding in your industry.
So...getting back to my request for information...
With this report we're keen on establishing a baseline from which more research might follow. Our goal is to publish a final version of the report's current iteration in January of 2008.
What kind of multiples have YOU seen? HOW have buyers been valuating YOUR firm (or vice versa)? Feel free to e-mail your thoughts to bskinner@kennedyinfo.com. Anyone is welcome to comment. I'll also check back here occasionally.
Thanks,
Brent Skinner
Research Director, Recruiting Group
Kennedy Information, Inc.
Attendees at last month's IAEWS Congress in Orlando, Fla. (which immediately followed Kennedy Information's Recruiting 2007 Conference and Expo at the same convention facility), took in a presentation of our findings and previewed the document's draft version, which became the subject of a discussion elsewhere on this site a few weeks ago.
To our knowledge, nobody has produced a research report such as this one to look specifically at your industry. In compiling the report, we've learned that little in the way of "actuals" (i.e., hard data on actual deals) is available; before presenting in Orlando, we in fact reached out to the private equity community for data on actual transactions in your market space, but to no avail. Since then, we've made inroads with a few folks who might be able to provide this kind of information. The takeaway seems to be that these deals commonly occur under the radar.
Meanwhile, in its draft form the report is already filled with qualitative data from interviews with experts in the field, as well as quantifiable data on actual job board leaders' expectations, activities, and attitudes regarding M&A in their industry.
From all of this, we infer that M&A activity is possibly on the verge of exploding in your industry.
So...getting back to my request for information...
With this report we're keen on establishing a baseline from which more research might follow. Our goal is to publish a final version of the report's current iteration in January of 2008.
What kind of multiples have YOU seen? HOW have buyers been valuating YOUR firm (or vice versa)? Feel free to e-mail your thoughts to bskinner@kennedyinfo.com. Anyone is welcome to comment. I'll also check back here occasionally.
Thanks,
Brent Skinner
Research Director, Recruiting Group
Kennedy Information, Inc.
Tags: 2007, a, acquisitions, and, board, capital, conference, dynamics, employment, equity
Replies to This Discussion
-
Permalink Reply by Chris Russell on
-
Brent I've heard rumors of anywhere from 2-4 times sales. When Journal Register Company bought Jobsintheus.com a few years ago I had a CPA friend look at their 10k to see if he could determine the amount they paid. He told me about $10-13 million so based on their annual sales of $3 mil you get 3-4 times
-
Permalink Reply by Brent Skinner on -
Saw your comment before I left town for a few days -- decided to wait until my return to respond.
That's interesting stuff. Others have shared anecdotal evidence (or speculation/rumors) of exceptionally healthy multiples like that of the deal you've mentioned. We've noticed that this outpaces the benchmarks/averages of other industries we're familiar with, including management consulting -- the one our in-house expert pointed to, as an example, at our Orlando presentation. Furthermore, some who've recently gone through private equity events in the job board space tell us (again, anecdotally) that the expectations are unrealistic in terms of the multiples job board leaders think they'll receive.
We're taking care not to qualify any of this yet. In the meantime, we're trying to figure out, at least preliminarily, whether multiples of three or four are indeed the trend or isolated incidences. Rumors of high-multiple sales, however, are interesting. This at least establishes that high multiples are not unheard of. The thing to determine is whether these events have become rumors precisely because they are exceptions to the rule, or because they in fact reflect a growing trend.
-
-
Thanks brent, so in your opinion what kind of multiples are realistic? 2x? That seems kind of low. For some one like me who owns his own job boards I cant ever see myself selling for anything less than 3x. I certainly hope thats not a pipe dream.
-
Permalink Reply by Tony Perry on -
Valuation varies by ownership makeup and the motivation to acquire. A public or venture group will likely weight gross revenue or EBIT/AR but a private group or individual will be more concerned with net income, or total income (owner compensation + profit). When you have low overhead, profit, and you demonstrate growth potential, 2 times sales might not seem worthy of consideration. The opposite is also true - If you have solid sales but zero or low profit / total income, and a competitive environment… 2 times sales might seem rich. I sold my shares in a board this year at approximately 2 times sales.
-
Permalink Reply by Brent Skinner on
-
We don't have a solid opinion on it yet -- which is why we're trying to get this conversation rolling. But, given the stories we've heard out in the field, your goal of 3X (or even more) doesn't seem to be out of the question. I do think what Tony says, below, makes sense, and may reflect the variables any job board aiming to secure more than 2X would be wise to consider.
Possibly as soon as next week, I hope to speak with a partner at a private equity firm that, I believe, has been involved on a number of deals in this space. That conversation might shed more light on this.
© 2008 Created by Chris Russell
