Recruit Co. Agrees to Buy Indeed to Fuel U.S. Expansion
Recruit Co., a Japanese human- resources company, agreed to acquire job-search website Indeed Inc. to help it expand in the U.S.
Recruit Co., which had 807 billion yen ($10.4 billion) in revenue in the year ended in March, will use Indeed as its global system for online recruitment, said Rony Kahan, co- founder of Stamford, Connecticut-based Indeed. Both companies are closely held, and terms of the deal weren’t disclosed.
Recruit’s purchase of Indeed is a vote for an advertising- supported revenue model, Kahan said. Its approach contrasts with that of Monster Worldwide Inc. (MWW), where customers pay to post job listings. Monster said earlier this year that it was considering strategic alternatives, including an outright sale of the business, though a buyer hasn’t emerged.
“This business model of including all the jobs, and having companies pay via clicks on ads instead of by post, represents the way the online recruitment industry is evolving,” Kahan said. “Recruit wants to keep Indeed doing what it has been doing.”
Indeed was backed by the New York Times Co. (NYT), Union Square Ventures and Allen & Co. The New York Times said today in a regulatory filing that it will record a gain of about $100 million after taxes from its stake.
Recruit Co. has been acquiring companies in an effort to boost overseas sales to 50 percent of its total, compared with about 4 percent now. The company is planning an initial public offering as early as next year to help finance more deals.
Indeed will operate as a separate business unit of Recruit, Kahan said. He and co-founder Paul Forster will stay with the 8- year-old company.
At Monster, takeover speculation boosted the stock almost 50 percent earlier this year, after Chief Executive Officer Salvatore Iannuzzi said he would consider a sale. The shares drifted back down as a buyer failed to materialize. Monster climbed 0.4 percent to $7.68 at 10:10 a.m. today in New York.
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