Article: Ikya deal: Beckoning the new era of recruitment services

Talent Acquisition

Ikya deal: Beckoning the new era of recruitment services

Ikya Human Capital's acquisition beckons a new area of global expansion and cost optimization in the Indian recruitment services space
Ikya deal: Beckoning the new era of recruitment services
 

The deal also opens possibilities of leveraging synergies of cost reduction and market integration

 

The largest deal in the Indian HR service industry until date, Ikya Human Capital’s acquisition beckons a new area of global expansion and cost optimization in the Indian recruitment services space

Ikya Human Capital, the Bangalore-based recruitment services company, was recently bought over by Thomas Cook, the integrated travel services firm, through purchase of a majority 74% stake. Thomas Cook is an investment channel for the Canada-based investment firm, Fairfax Financial Holdings Limited. With over 500 organizational clients, and 1,400 employees, Ikya Human Capital has over 32 offices across India.

The acquisition will enable Ikya Human Capital and Thomas Cook to leverage mutual synergies of pan-industry representation. The 256 crore deal, the largest of its kind in the HR services industry in India, will allow Ikya Human Capital to increase its pan India and cross-industry presence. Ajit Isaac, CEO of Ikya Human Capital says that it will also allow the company to fuel its global expansion plans.

The company is presently in the final stages of setting up an office in Phillipines and will be looking to start operations across the next two months. Ikya Human Capital already has an office in the Middle East and the company will be looking to scale operations there. The company is also progressively looking at establishing a presence in Africa.

Isaac is confident that the funding will enable the company to pursue its organic and inorganic expansion plan. Industry analysts predict that 2013 will mark the start of significant consolidation activity in the recruitment services space in India. Ikya Human Capital is also looking at growth through acquisitions. The company has done a string of acquisitions in the last few years and Isaac mentions that they are now sufficiently capitalized to continue expansion through acquisition. In addition, Isaac mentions, “The funding will allow Ikya Human Capital to acquire remaining stakes in a few companies to enable them to become wholly-owned subsidiaries.”

Isaac believes that this funding will enable them to work toward their target of achieving their revenue aspirations over the next five years. This signals that market expansion will be the key agenda for both homegrown and multi-national recruitment service companies in India across the coming months.

The deal also opens possibilities of leveraging synergies of cost reduction and market integration. Isaac believes that Ikya Human Capital will be looking at opportunities to bank on Thomas Cook’s strong B2B presence in India. There are also cost efficiency opportunities that the deal presents through integration of back-end operations and technology. Isaac says that, “There are sizeable opportunities for cost reduction as both companies have strong back-end transactional process infrastructures that can be integrated. We can look at a combined structure at the back-end that will help us bring the cost of operations down dramatically.”

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Topics: Talent Acquisition, Social Media

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