April 17, 2014
Talent Assessment Space Seeing Strong M&A Activity
The talent assessment space has seen strong M&A activity over the past 18 months. We view talent assessment as being a strategically important component of broader HR and talent management solutions across software (Taleo, SuccessFactors, Workday), services (Hay Group, Aon Hewitt, Korn Ferry) and data (Corporate Executive Board, Wiley) vendors. Several players across the broader HR and talent management space have been focused on building out their assessment offering and it is increasingly becoming accepted and embedded as a key recruiting and hiring step by large organizations seeking to ensure the ultimate success and retention of new talent within their organizational culture. We like to view it as the eHarmony of corporate recruiting.
This week, Hay Group, a leading HR focused management consulting organization announced that it had acquired Talent IQ, an online psychometric assessments, training and consultancy services provider. Another deal announced last week was John Wiley & Son’s acquisition of Profiles International, another provider of employment assessment and talent management solutions (the deal happened at roughly 2.0x revenue). Other recent deals of note include Corporate Executive Boards’ acquisitions of SHL and Valtera, Korn Ferry’s acquisition of PDI Ninth House and the acquisition of Linkage by a consortium of private equity firms.
We expect to see continued M&A activity in the space as we believe there is a real convergence of software, services and data happening across the talent management industry. We fully expect the large software vendors in the space as well as services (consulting, training, recruiting) firms to seek out opportunities to build assessment capabilities.