May 13, 2015

Mastech to Acquire Hudson Global’s U.S. IT Staffing Business

Mastech to Acquire Hudson Global’s U.S. IT Staffing Business – A Sound Strategy to Combine High-Volume VMS Centric Capabilities with a Direct Retail Relationship Driven Business Model.

Mastech recently announced it has agreed to acquire Hudson Gobal’s U.S. IT staffing business.  While the financial details of the deal have yet to be disclosed, we applaud Mastech’s strategic rationale for the transaction.  There are some in the industry that believe pursuing a high-volume VMS strategy conflicts with the high-touch, direct retail staffing model and they can’t coexist. However, we know the two business models can complement each other and create synergies if executed properly. Mastech historically has focused on the VMS staffing market but with this acquisition, it adds the ability and know-how to penetrate the retail market. In addition to a centralized recruiting center in India, Mastech now has a larger local presence in attractive markets. The acquisition also adds a significant number of sales people and recruiters who are well versed in managing direct retail client relationships, which typically require a “higher touch” but also generates higher gross margins. If Mastech can successfully integrate the two businesses and capitalize on the potential synergies, it will become a formidable competitor over the next few years.