Adecco has sold a majority stake in its Beeline vendor management system division for $100 million in cash plus a $30 million note to Chicago-based private equity firm GTCR, which also holds a majority stake in IQNavigator. Plans call for merging the operations of Beeline and IQNavigator, with Adecco continuing to hold a minority interest in the combined firm.
“This is a real indicator of how the market is evolving toward consolidation, but also speaks to the need for continuing investment in innovation in the HR technology space,” said Bryan Peña, senior VP of contingent workforce strategies at Staffing Industry Analysts. “Many of these VMS technologies are old and due for significant refreshes, which take significant investment. So as a part of this acquisition by GTCR, we should expect to see further consolidation, innovation and investment in this particular area.”
The deal closed Monday.
“This merger is an exciting step for our two companies as we continue to lead the development of the VMS industry and deliver the next generation of contingent workforce technology,” said Doug Leeby who has been appointed CEO of the combined company. “We now have over $40 billion of spend under management for customers in over 100 countries.”
Leeby previously was CEO of Beeline. Joe Juliano, former CEO of IQNavigator, is a member of the board of the newly combined company.
The combined company will have more than 500 employees in total and continue to be operate from offices in Jacksonville, Fla., and Denver, Colo. The companies also have offices in the UK, Singapore and the Philippines.
“This is a very exciting announcement for the market as it brings together two giants of the VMS global landscape,” said Elizabeth Rennie, global workforce solutions research director for Staffing Industry Analysts. “IQNavigator and Beeline combined represent 34% of the total MSP market (by worker headcount), challenging Fieldglass’ global position.”
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The combined companies say they will leverage the complementary technical strengths of both Beeline and IQNavigator although how this plays out remains to be seen.
IQN released a list of frequently asked questions regarding the merger.