On the face of it this is a pretty straightforward deal, a union between a large international firm and a smaller, high-end UK outfit. The logic for the purchase is clear - Korn/Ferry is a big name internationally, especially in the US, but has struggled to get much of a foothold in the prestigious trade of hiring C-suite types for FTSE 100 boards over here.
Whitehead Mann, on the other hand, is one of the UK’s leading names in this esoteric but undoubtedly lucrative business, where fees run well into six figures and having the right names in your contacts book is the difference between winning the pitch and losing it. Recent high-profile jobs undertaken by the firm include placing the new chairman of the Court of the Bank of England, and of course leading the boardoom clearout of RBS and recruiting Sir Philip Hampton as the new chairman.
So Korn/Ferry is happy – it’s bought itself a nice way in to a tasty earner and a top-notch brand to boot. Playing off the brand strength, the combined firm will be known as Korn/Ferry Whitehead Mann. It may not exactly trip off the tongue but it does the job.
The upside for Whitehead Mann is perhaps less obvious, and finding it requires a quick trawl through the recent past. For starters, the top-line recruitment business isn’t what it once was. The recession has hit ‘executive search’ particularly savagely, and firms like Whitehead Mann which have traditionally relied on a relatively modest number of very big-ticket jobs are struggling.
The ‘standard’ fee in this market is around 30% of first-year salary – up to £250,000 a pop for recruiting the most senior players in UK plc. You don’t need to lose too many gigs like that before you start feeling the pinch: Whithead Mann has recently closed three regional offices and shed some 25 employees, including senior partner Carol Leonard. You remember her – she used to run a search business with Ffion Hague.
At its most powerful in the late 90s when the legendary Anna Mann swept all before her, the firm took a bad blow when she left some five years ago and has never been quite the same since. There’s also the vexed question of money. Taken private for £26m by its senior staff – headed by CEO Piers Marmion and funded by private equity group Och-Ziff - in 2006, Whitehead Mann’s backers may well have been getting twitchy about their exit prospects. So this deal will likely be welcomed by them, although how much dosh will change hands is a closely-guarded secret.
And although the firm’s senior staff are all thought to be joining the combined group, the acquisition is unlikely to be great news for Whitehead Mann’s support staff. Mergers in this business are just like the rest – consolidation generally means job cuts. Rumour has it that the axe has already started to fall…
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