Glassdoor, the employer reviews and jobs listing site, is being bought by Recruit Holdings, parent company of the international job board Indeed. The $1.2 billion sale was announced last night.
Glassdoor will continue to operate “as a distinct and separate part of (Recruit’s) growing HR Technology business segment,” according to the announcement. Glassdoor co-founder and CEO Robert Hohman will continue in that position. A Bloomberg report said Glassdoor’s 750 employees won’t be affected for now.
This is the second jobs site acquisition in less than a month for Recruit. In April, the Japanese conglomerate acquired the Canadian job board Workopolis for an undisclosed amount. The classifieds consulting and research firm AIM Group speculated the purchase price was somewhat more than $34 million. In that deal, Workopolis.com continues as a brand, but with all listings funneled through Indeed.
In 2016, Recruit acquired SimplyHired, a direct competitor to Indeed.com. Both job sites launched within months of each other (Indeed in late 2004; SimplyHired in early 2005) and had the same business plan. Job listings were free, initially obtained by scrapping other job boards and company career sites. Over time, the business models evolved to a pay-per-click plan. Though for a time the sites ran head-to-head, Indeed captured an increasing share of the market. The site’s acquisition by Recruit in 2012 for a reported $1 billion accelerated its growth, and it catapulted ahead, not only of SimplyHired, but the pay to post job boards Monster and CareerBuilder to make it the largest career site in the world.
At the time, Recruit CEO Masumi Minegishi made clear his goal was “to be the leader in HR and recruitment services worldwide.”
Recruit Holdings owns and operates a broad mix of businesses that include online sites selling services in travel, real estate, beauty, automotive and hospitality. For its fiscal year ending March 31, 2017, Recruit had total revenues of 1,941.9 billion yen ($17.70 billion US by current exchange rates). Indeed is Recruit’s smallest segment by revenue, last year grossing 132.7 billion yen ($1.21 billion US current exchange rate). The company’s largest segment is its staffing business. In 2017 staffing accounted for 1,170.8 billion yen ($10.67 billion US current exchange rate). It’s staffing holdings include The CSI Companies, Staffmark, Advantage Resourcing, Peoplebank, Chandler Macleod and USG People.
Glassdoor is the second-largest careers site in the U.S. by traffic, according to a report by the AIM Group. The 10-year-old site is visited by 59 million people monthly and contains 40 million reviews and data details on some 770,000 companies worldwide. Besides reviews by employees and former employees, Glassdoor provides CEO ratings, interview questions, salary information and more on each company in the database.
According to a Recruit Holdings announcement, Glassdoor sales of its employer branding services, job postings and related products brought in $170.8 million for the 12 month ending March 31, 2018. It lost $22.2 million. While paying a 7x multiple to sales, Recruit made clear its interest in the acquisition was long term, rather than a quick accretion to revenue.
“We are focused on deploying capital efficiently to ensure we are creating shareholder value,” said a posting on the Recruit Holdings website. “We view the transaction as strategically important as it brings a very complementary set of assets to the HR Technology portfolio. From our medium- to long-term perspective, this acquisition will allow us to create significant value for jobseekers and employers around the world.”
Though Glassdoor will join Indeed in Recruit’s HR Technology segment, it won’t become part of Indeed, as previous acquisitions have. However, the two subsidiaries will work together in some as yet unspecified way. “Recruit foresees significant opportunities for growth as Glassdoor and Indeed collaborate to meet challenges faced by both job seekers and employers. This acquisition enhances the Company’s position as the leader in job search, job aggregation, job seeker and employer matching, and utilizing direct job seeker input to improve the overall job search experience,” Recruit said.
Yushi Kawamoto, an analyst at Haitong International Japaninvest KK, told Bloomberg that,“Looking for jobs through employer reviews is becoming more popular, so buying Glassdoor not only grabs more users but also strengthens Recruit’s existing HR platform. Recruit is paying about seven times sales, which isn’t high. This will boost their competitiveness. So overall this is positive for Recruit.”
The transaction is expected to close in late summer.