Apollo Global Management buys majority of CareerBuilder

19 Jun 2017

The deal to buy CareerBuilder is done — but it didn’t go down quite as expected.

In May, Reuters reported that private equity firm Apollo Global Management was the leading contender for the recruitment classified site owned by Tegna, Tribune Media and McClatchy. That was after negotiations with another suitor, GTCR Ltd., ended unsuccessfully.

Today, Apollo and a Canadian pension fund — the Ontario Teachers’ Pension Plan Board — announced they will acquire all but 24.3 percent of CareerBuilder when the deal closes, expected in Q3 FY2017.

When Tegna announced that it was essentially shopping CareerBuilder in September 2016, the assumption was the current owners wanted to sell all their shares. That’s clearly not what happened today.

Tegna will receive $250 million and its stake in CareerBuilder will drop from 53 percent to 12.5 percent. Tribune will receive $157 million and its share in the company will be 8 percent, down from 32 percent currently. McClatchy is getting $68 million for selling 11.2 percent of its current 15 percent.

The fit with Apollo looks like it could be a good one for CareerBuilder. Apollo already has a number of international brands in its portfolio, including Hostess Snacks, Rackspace, Caesar’s Entertainment and Norwegian Cruise Lines.

The private equity firm’s investment strategy is to “pursue acquisitions where we believe a non-core business owned by a large corporation will function more effectively if structured as an independent entity managed by a focused, stand-alone management team,” according to the Apollo website.

That would describe CareerBuilder, which since Tegna’s spin-off from Gannett, has been the odd man out in Tegna’s portfolio of TV stations.

And while the Ontario Teachers’ Pension Plan Board might sound like an odd match with CareerBuilder, it’s also quite large, with $175.6 billion in assets.

Apollo took the lead in the investment, with the company’s senior partner David Sambur saying in a statement that “CareerBuilder is a global leader in human capital solutions, and we are excited to work with the company in the next phase of its growth and development.”

Sambur emphasized CareerBuilder’s move towards becoming a software-as-a-service (SaaS) platform, which suggests that it was CareerBuilder’s HR opportunity, not its long-standing job board business, that drove Apollo’s interest.

It will be interesting to see whether CareerBuilder’s new majority owner can take the company to new places, as well as how well they get along with the previous owners which, despite perhaps their best efforts, are still involved in the company — albeit now with much less of a say.

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Brian Blum

Brian Blum covers the U.S., Canada and Israel for Classified Intelligence Report, and contributes to our special reports and research projects. Originally from San Francisco and now based in Jerusalem, he has been with the AIM Group since 2004. He is the president of Blum Interactive Media, specializing in writing and multimedia content development for online, print, video and audio. His clients include newspapers, universities and non-profits. He is currently working on a book about the billion-dollar bankruptcy of a once high-flying Israeli startup.