Headhunter.net, CareerMosaic Seal $109 Million Merger Deal
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Online jobs sites Headhunter.net Inc. made CareerMosaic an offer, and on Monday the Omnicom Group subsidiary took the position in a $109 million merger that creates a more powerful player in the crowded Internet recruiting space.
The deal calls for Headhunter.net (HHNT) to issue 7.5 million shares of stock ,which was valued at $14.5 at Friday's market close. Headhunter.net's stock had slipped half a point to 14 by mid-morning on Monday. After the deal, Omnicom (OMC), through its Communicade division, will own 40 percent of the combined company.
Bernard Hodes, president of CareerMosaic and head of the Omnicom company, Bernard Hodes Group, that owned CareerMosaic, will take a seat on the board of the combined firm. The relationship is significant, because the Bernard Hodes group is one of the nation's largest recruitment agencies, and is one of CareerMosaic's biggest customers.
Online job sites have had a major impact on the advertising industry -- both because they are picking up employment advertisements from companies and recruiters, and because they've been spending significant dollars both online and offline in efforts to build their brands.
Although the companies will keep their respective brands for now, as soon as the deal closes -- which is expected to happen in the third quarter of 2000 -- Headhunter.net and CareerMosaic will combine into one brand and site.
"The combination will significantly expand our growth potential by broadening our markets beyond Headhunter.net's focus on small businesses, the middle market and recruiters," said Robert Montgomery, president and chief executive officer of Headhunter.net.
"CareerMosaic's customer base includes a strong presence in the Fortune 1000, agency, college and international markets. In addition, our users will benefit from the additional content of our combined sites since less than 10 percent of our users overlap based on recent industry data."
The new company boasts that it will have a combined 250,000 job postings, 450,000 resumes, and over 7 million visitors per month.
With regard to relationships, the merger brings together two very complementary companies. Headhunter.net has a deal with NBCi, which operates the Snap portal, and with Excite. In contrast, CareerMosaic has a deal with Yahoo!.
Headhunter.net and CareerMosaic expect to benefit by combining their technological systems and leveraging their sales and marketing efforts.