Two recent acquisitions were the topics of this week’s Market Minute – First Advantage, a global provider of workforce solutions, was acquired by Symphony Technology Group, a private equity firm with a strategic focus on software and service, and Enwisen, a leading software-as-a-service provider of human resource delivery solutions, has been acquired by Lawson Software. Rick Fletcher, Ron Hanscome and Matt Lafata discussed these acquisitions and trends in the space. Key takeaways from this Market Minute are:
First Advantage Acquired by Symphony Technology Group
- History of First Advantage – Formed 5-6 years ago through a fund of money with 80% owned by First American Bank. During an 18 month period, 20-25 companies were added including two applicant tracking systems, (Projectix and HR Logix) and an assessment vendor. Difficulties arose due to companies being bought with overlapping capabilities – there was little integration between all of the companies and overlap between the two applicant tracking systems. Their background checking division has proved to be the most profitable.
- Symphony Technology Group – Has been making a move into the Human Capital Management space and is a fairly large shareholder in Lawson software, for example, and through its subsidiaries offers a portfolio of capabilities – background screening, occupational health services, applicant tracking systems, behavioral assessments.
- This acquisition signals yet another private equity firm acknowledging that there is money to be made in the HCM marketplace and putting their money on an existing player. It also serves as a marker of the continued flow of private equity money that we have seen into the space. Recent examples:
- Acquisition of Ceridian by Thomas H. Lee Partners and Fidelity National Financial
- Acquisition of SumTotal Systems by Vista Equity Partners
- Acquisiotn of Peopleclick and Authoria by Bedford Funding to form PeopleclickAuthoria
- Kronos taken private
- Why are private equity companies investing so much money in the HCM industry?
- It appears that this is a sign of businesses and business leaders putting their money where there mouth is around people being the most important part of the business and an admission that the value of the business is more than what is on the balance sheet, but also the intangible asset in human capital
- As private equity firms see businesses investing in more of these types of solutions, they are trying to take advantage of that and view this space as a place where there is money to be made.
Enwisen acquired by Lawson
- Lawson is an ERP vendor which has recently been doing interesting things around Talent Management
- Enwisen offers HR case management / shared services, onboarding/offboarding, HR knowledge base, etc., and has been a strategic partner of Lawson since 2008. Founded in 1994, Enwisen has focused on the low end of employee benefits decision support for providing the knowledge around what benefits to purchase for the mid-market segment, while Authoria serviced the top end through their arrangement with PeopleSoft and other large core HRMS vendors. As Authoria began to focus increasingly on Talent Management, Enwisen absorbed much of the benefit support knowledgebase activity.
- Through the years, Enwisen has done a great job of adding onboarding and selling a lot of it, as well as other elements such as policy and procedures support through their relationship with BNA, and linking that in so that HR administrators and generalists can have access to updated policy information as well as manager support – how to conduct a performance appraisal and other basic elements of HR. Finally their total compensation statements module which is a powerful toolkit for analyzing compensation and generating those statements.
- Interesting acquisition for Lawson, in that Learning is still a gap in the Lawson Suite. Though Lawson has built out a learning module, it still has not seen a lot of penetration. They saw a lot of traction with the reseller arrangement with Enwisen; a lot of business into their base around the self service capabilities, the benefits support, and the onboarding. Lawson chose, at this moment, to up the ante and make the big investment by completely buying out Enwisen.
- When all the pieces are put together, Lawson’s acquisition of Enwisen makes a lot of sense and will help the organization continue to grow in its footprint around HCM:
- Leveraging Enwisen’s track record pertaining to onboarding solution activity that has been competing with SilkRoad a lot in that space
- Enwisen is a real asset to the Lawson family in that there is not much overlap between solutions
- We are seeing a major increase in HR case management, a strong suit for Enwisen – companies don’t want to buy a generic CRM application to support ticketing or open HR issues
And finally, with both acquisions, one always has to think about execution being fundamental to the success or failure of the acqusition:
- Seamless user experience will be key for Lawson and Enwisen going forward
- First Advantage is going to continue to hopefully improve the integration under Symphony’s ownership and also be able to integrate things like background screening well, and hook into all of the other recruitment systems out there
To listen to the Market Minute in its entirety, use the link below, or download it to your iTunes by visiting http://blogtalkradio.com/HRchitect.
Posted by Tiffany Appleby 
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