It’s another pickup for HR tech company HIRE Technologies (HIRE Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:HIRE) as the Toronto-based staffing and IT solutions business has announced the acquisition of Boston-based team management platform Pulsify.
HIRE on April 1 announced the acquisition of Pulsify, a cloud-based people management company, in a transaction involving about 3.1 million newly issued HIRE shares and a potential added US$1.5-million in earn out payments.
“We are excited to add this highly effective HR technology product to our portfolio, the first of HIRE’s HR SaaS products,” said Simon Dealy, CEO of HIRE, in a press release.
“Good people management is a challenge for many companies, particularly now that teams are working remotely, but it is vital to business success. Our clients have already requested assistance in this area, and we will be able to provide this cost-effective solution that does not require the implementation of an entire HR team,” Dealy said.
It’s the latest in a spate of moves for HIRE, founded in 2017 and having joined the TSX Venture in late 2019 through an RTO. HIRE’s share price proceeded to double in value over 2020.
But HIRE’s engines continue to fire on the acquisitive front, where the company looks to consolidate in the HR tech space.
Over the fourth quarter 2020, the company acquired staffing solutions business The Headhunters Recruitment, industrial and healthcare sector employment agency Kavin Talent Management & Recruiting and then Vancouver-based executive search firm Taylor Ryan in December. HIRE also made a ten-per-cent strategic investment in Atlas ID Systems, an HR tech company with a COVID-19 risk mitigation platform for employers.
Now in 2021, the new Pulsify purchase is HIRE’s first foray into the US market, with the company eyeing to take a bigger bite out of the global US$17.6-billion human capital management sector.
HIRE grew its internal employees by 50 per cent over the second half of 2020 while completing two private placement financing rounds for a total of $6.5 million, funds which have gone a long way in supporting the company’s ability to add accretively to its expanding roster of HR businesses.
“Since the start of 2020, we have attained an upward trajectory for our share price and raising our market cap from $8 million to approximately $40 million, creating value for our shareholders all during the worst pandemic in a century,” said Dealy in a corporate update in January. “Our recent acquisitions have added strong leaders to our team, and our operational focus for Q1 2021 is to integrate them into the HIRE Technologies network.”
HIRE last reported its quarterly financials in November 2020 where its third quarter numbers featured revenue down 16 per cent year-over-year to $2.5 million, with an adjusted EBITDA loss of $56,477 compared to a loss of $145,862 a year earlier. (All figures in Canadian dollars except where noted otherwise.)
Management attributed the drop in revenue to overall COVID-19-related market weakness and particular weakness in permanent placements in the accounting and finance space. Operationally, HIRE saw SG&A expenses grow year-over-year from $1.6 million to $1.9 million with one-time expense items accounting for the increase.
“While headlining [in the third quarter] was the acquisition of The Headhunters, our operational improvements allowed us to break even on an adjusted EBITDA basis,” Dealy wrote in the Q3 press release. “This was a record quarter in the short history of our company and we are now better positioned than ever to meet the changing demands of our clients and partners.”
Along with ongoing changes to recruitment and staffing being carried out through the remote work revolution, the sector is taking part in the wider digital transformation, where hiring are not only going more virtual but they’re reaching more deeply into the AI and big data bag of tricks in an effort enhance predictive analytics, with, for example, natural language processing playing a larger role in candidate screening.
Aiming now to be a driver of this sector-wide shift, HIRE had a major executive shakeup last April when Dealy, a co-founder of the company and President since 2018, took over as CEO from the outgoing Allan Hartley, while the company also added a new Chief Legal Officer and CFO.
Concurrent with Dealy’s appointment as CEO, the company changed its name from Bay Talent Group to HIRE Technologies in an effort to better reflect its tech focus in the HR and recruitment space.
“Our mission as an acquirer of technology and staffing firms is to develop a comprehensive network of solutions to assist employers in the pursuit and retention of top talent, with SaaS based technologies at the forefront of our offering,” said Dealy in a press release last April.