Consolidation In SMB Market As Bullhorn Acquires Two Competitors

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Nov 28, 2012
This article is part of a series called News & Trends.

At once swooping up its two of its largest competitors, Bullhorn today became one of the largest, if not the largest, technology providers to staffing and independent recruiting firms in the world.

Describing it as “an incredible moment for Bullhorn customers,” company CEO Art Papas announced the acquisition of both MaxHire and Sendouts.

“We’re acquiring two extremely talented teams, both of whom have succeeded in delighting their large customer bases with a combination of product innovation and excellent service,” Papas said in a news release. “These acquisitions dramatically increase our ability to execute on our vision of helping recruiters be more successful, develop new products, and serve our exponentially expanding user base.”

Details of the sale weren’t disclosed, however both MaxHire and Sendouts will operate under the Bullhorn brand. MaxHire’s CEO Peter Blitz, who founded the company in 1995, will become Bullhorn’s product innovation officer. Sendouts’ CEO Brian Hopcroft will become general manager.

Customers of each company will continue to use the existing software and will be supported as they always have, assured Andrew Hally, Bullhorn’s vice president of product and marketing. “Both products (MaxHire and Sendouts) are staying… We are not shutting down the products,” Hally explained, though the individual companies will immediately be folded into Bullhorn.

Where Bullhorn is especially strong in the staffing sector, counting industry giants Randstad and Kelly among its clients, MaxHire and Sendouts each have about 1,000 customers, the majority of them smaller, 3rd party recruiting  firms and hybrids. Sendouts is strongest among small search firms and independent recruiters. MaxHire has somewhat larger search firms and more local and regional temp and contract labor firms.

The acquisitions strengthen Bullhorn’s place in the independent recruiting firm arena, especially among those smaller firms. By far the largest number of third-party search and staffing firms have fewer than 50 employees, many with fewer than 10.

Now, counting the new customers, Bullhorn’s base has grown to about 5,000 firms with about 50,000 users in some 150 countries. It has somewhat more than 100,000 users of its paid and free product, Bullhorn Reach.

While consolidation of the large, enterprise HR software market has been underway for a few years, with SAP buying SuccessFactors, Oracle acquiring Taleo, and IBM buying Kenexa in just the last 12 months, the lower end of the market has been much less active.

Papas signaled his intention to acquire companies serving this market back in June, when Bullhorn itself was acquired by Vista Equity Partners. The purchase price wasn’t disclosed, but industry reports put it at something north of $100 million. Papas said then he would be looking at companies with products geared to the 3rd party recruiting market.

Hally said that while consolidation and the economies of scale were a consideration, the primary driver of the deal was “people. We’re competing for legions of other tech firms for talent, here in Boston (where Bullhorn is headquartered),” Hally pointed out, and the difficulty in hiring was acting as “a brake on our growth plan.”

So to be able to acquire teams of software developers, engineers, and sales people “already fluent in the language of recruiting and talent acquisition was the primary driver,” he said. (Some layoffs in other, back-office areas, will occur.)

Not far behind, Hally acknowledged, was the collaborative development opportunities created by bringing together three companies operating in the same sector. “Number two (in terms of priority for making the deal) is the product thing,” Hally said. “All three companies are investing in the very same thing. So instead of having three teams developing the same products for three different companies.. it made sense to bring them together.”

Like Bullhorn, both MaxHire and Sendouts are SaaS based. The latter is a front-end only system, offering an ATS with all the fundamental CRM and database features, and a strong focus on sourcing. Sendouts integrates with a number of job boards to post jobs automatically, but most importantly it will automatically search thousands of online sites for candidates matching a user’s criteria.

Specialized features for temp and contract labor are limited to a rudimentary back-office payroll integration and a basic VMS (Vendor Management System) tool, VMS Sync.

MaxHire has a broader toolset for temp and contract labor. It’s MaxHire Financials provides timesheet management, invoicing, and payroll and commission reporting on the desktop, while passing data off to payroll processors and to other back-office services. It has a more sophisticated sourcing feature that, like Sendouts, will search for online resumes, but also connects to Hoovers and Broadlook, and aggregates candidate information from multiple social networks.

MaxHire comes in two flavors: A recruiting and sourcing ATS and CRM, with detailed reporting capabilities; and, a version for the staffing industry that includes the financials elements. Pricing for the Staffing Edition is flexible; for the Front Office Edition pricing starts at $99 a seat per month, the same price as Sendouts amd Bullhorn.

Over the next several months, Bullhorn will bring together the engineering teams to work on a major upgrade of the Bullhorn platform. Hally says it isn’t a product integration. Instead, he described it as “a combined integration path.” Targeting the end of next year, Hally said Bullhorn plans to release a “multi-platform, smartphone enabled, multi-browser, tablet-friendly, PC friendly upgrade” that will include features like the VMS.

Undoubtedly, Bullhorn at some point will move away from supporting the MaxHire and Sendouts platforms. Hally didn’t say when that might happen, but a reasonable bet would be after the major upgrade to Bullhorn’s ATS/CRM platform is released.

This article is part of a series called News & Trends.
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