Analyst Corner

Trick or Treat? Kronos Buys Deploy

jason.corsello — Thu, 01 Nov 2007 03:46:41 GMT

Today, Kronos announced the acquisition of Deploy Solutions. A couple of observations...

Deploy had been shopped for almost a year with nearly every potential acquirer passing on the deal. Not necessarily the hottest, most sought after deal out there.

It is speculated that the company has raised around $100 million to date with much of the capital coming from Chairman, Ray Stata, father of CEO, Nicole Stata. Rumors are that the acquisition was valued at a fraction of the capital invested.

What is Kronos actually buying? If you believe the press release, they are getting "...expertise and technology to penetrate new markets". If you ask me, they are eliminating a competitor and getting a few nice customer brands. That's about it. What's surprising is that Kronos has been on the hunt for a salaried recruitment vendor for some time, but yet settle on another niche, hourly-focused recruitment vendor.

Kronos has yet to prove they can play in talent management and make acquisitions work. Many of my financial analyst friends would argue that the Unicru acquisition has been a disappointment so far.

The good news in this acquisition is that we are starting to see the hourly market pick up and their are only a few vendors that can really play there including Vurv , Taleo and Peopleclick. Most companies still do a poor job in hourly recruiting (as I wrote recently on the Human Capitalist ) and the market is ripe for true innovation, delivering jobs to where the candidates hang out online such as Facebook, Myspace, etc.

I thought it was quite ironic the acquisition was announced on Halloween. Time will tell who got the trick and who got the treat.