Let the Talent Management Roll-up Begin

Late last week, SilkRoad technology announced raising a whooping $54 million in equity financing.  SilkRoad is the combination of both organic and acquired products and is mostly recognized for its RedCarpet onboarding solution.  The company also provides talent acquisition, performance management, compensation management, and self-service solutions.

So you may be asking yourself, “What the heck are they going to do with so much money and why do they need it all now?”  Obviously CEO Andrew J. “Flip” Filipowski has a plan that investors have bought. 

With industry consolidation accelerating, I would assume SilkRoad will begin an aggressive strategy to roll-up the industry and acquire other talent management companies on the cheap.  CEO Filipowski has a track record of acquiring and integrating companies with over 200 to date.  Additionally, the company will need to spend more aggressively in sales and marketing if they would like to compete against the defacto leaders such as SuccessFactors and Taleo. 

Interestingly, if this is the case, it will not be the first time “Flip” has pursued a roll-up strategy to acquire companies at deflated values.  His previous company, divine, has an interesting legacy catalogued on Wikipedia (some of SilkRoad’s products such as ePrise came from the late divine).  It cannot be argued, though, that Flip has also been wildly successful, selling one of his early ventures, Platinum technology, for nearly $4 billion, a record at the time for a software company.

Another sign pointing towards continued HCM consolidation.

May 19th, 2008

2 Comments Add your own

  • 1. gaz  |  May 20th, 2008 at 10:40 am

    where does Kenexa figure in your analysis? Given their history of acquisitions, how do they impact/ are impacted by this?

    thanks,
    gaz

  • 2. Jason Corsello  |  May 20th, 2008 at 7:38 pm

    Kenexa seems to have a pretty stringent acquisition strategy in which the acquiree must be accretive to earnings. This essential means the acquiring company (Kenexa) will have to report higher earnings per share after all the costs of the transaction are figured in. Not many of those companies out there in this market!

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