Heidrick & Struggles Acquires Senn Delaney, The Leading Corporate Culture-Shaping Consulting Firm
Heidrick & Struggles International, Inc., a provider of Executive Search and Leadership Consulting services worldwide, announced the acquisition of Senn-Delaney Leadership Consulting Group, LLC ("Senn Delaney"), the leader of corporate culture shaping. The transaction, which closed on December 31, 2012, is expected to be accretive to Heidrick & Struggles' earnings per share in 2013.
For 34 years, Senn Delaney has been chosen by leaders of Global 1000 and Fortune 500 companies and other major non-profit organizations, institutions and government entities as their trusted partner to help create and maintain thriving organizational cultures, a key driver of business performance.
"This acquisition is a significant milestone in our strategy to build the premier professional services firm focused on serving the leadership needs of the world's top organizations," said L. Kevin Kelly, Chief Executive Officer of Heidrick & Struggles. "This is a marriage of two premium brands that both pioneered their industries and both serve the top executives of leading organizations. Culture shaping is a service that appeals directly to our target market—C-suite and Board-level executives—making it a highly complementary offering to our premium Executive Search and Leadership Consulting services. At the same time, Senn Delaney gains access to the resources and global reach of the Heidrick & Struggles' platform which we believe will accelerate its growth."
Senn Delaney will operate as a subsidiary of Heidrick & Struggles from its Huntington Beach, Calif. headquarters. Senn Delaney's President and Chief Executive Officer, Jim Hart, will join Heidrick & Struggles' Operating Committee and will report to Eric Olson, Global Managing Partner of Leadership Consulting. Dr. Larry Senn, Founder and the current Chairman, along with the key executives of the firm are expected to remain with the company for a minimum of three years, ensuring senior leadership continuity.
"We are excited about joining Heidrick & Struggles, a highly respected firm with a rich heritage of helping clients build the best leadership teams in the world. This transaction is an endorsement of Senn Delaney's success and an acknowledgement of the increasing importance of culture shaping to executives around the world," said Mr Hart. "Heidrick & Struggles provides Senn Delaney the immediate global reach and access to resources we need to take our business to the next level. Our service offerings are very complementary and we see incredible opportunity to leverage our respective client relationships to provide additional capabilities. We can't imagine a better partnership."
Dr. Senn said, "Our new relationship with a legendary firm like Heidrick & Struggles will help us better fulfill our purpose of making a positive difference in the world by creating thriving organizational cultures."
Under the terms of the purchase agreement, Heidrick & Struggles paid $53.5 million at closing for 100 percent of the equity of Senn Delaney. The company could pay up to $15.0 million of additional cash consideration based on the realization of specific earnings milestones achieved in the first three years. Also, there is a $6.5 million retention escrow that will generally vest and be paid to certain key executives if they remain for three years subsequent to the acquisition. The transaction was financed with cash, but Heidrick & Struggles expects to explore additional options for financing a portion of the initial purchase price.
Mr. Kelly added, "Senn Delaney is a world-class organization and our transaction reflects the high quality of its historical earnings and expected performance, without taking into account any future synergies. Senn Delaney's management team and its consultants are passionate about the value of their product and service offering and are the best at what they do. We couldn't be more excited about the prospects of what this combination will mean to our clients, our employees and our shareholders."
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