SEEK abandons $41Mn takeover of HR tech firm Xref
NEW SOUTH WALES, AUSTRALIA — The proposed acquisition of HR tech company Xref Limited by employment marketplace giant Seek has collapsed after failing to secure sufficient shareholder support.
While SEEK is no longer pursuing the buyout of Xref, it intends to explore other collaborative opportunities with the company, with whom it has maintained an official partnership since early 2023.
Market impact and deal analysis
Seek’s October 2024 offer at AUD 0.218 (US$ 0.14) per share failed to reach the 75% threshold of approval from shareholders. The deal collapse has affected both companies’ market positions, and Xref shares have dropped drastically to AUD 0.12 (US$ 0.075).
The failed acquisition is a blow to Seek’s growth in the HR technology industry.
Xref will continue to operate independently on the ASX, pursuing its growth strategy that includes increasing self-service features and expanding its offshore development team in Pakistan. The company recently projected annual salary costs of AUD 16 million (US$ 10 million) for FY2024, while implementing cost-efficiency measures, including a 39% reduction in marketing spend.
“Xref will continue to execute its growth strategy as an independent business and will release a business update in the coming days,” says the company.
For SEEK, which has minority investments in employment marketplaces in China, South Korea, and Bangladesh, the attention will probably be on alternative growth opportunities within the recruitment technology space.
“Accordingly SEEK will continue to explore other opportunities to grow placements, grow yield and improve operating leverage, which may include alternative approaches to achieving the benefits that the scheme would have provided,” says SEEK.
Industry position and market presence
Seek operates as an online employment marketplace across Australia, New Zealand, Hong Kong, and Southeast Asia. The company employs more than 1,000 people and earns revenue of AUD 1.08 billion (US$ 679 million). Its products are job advertising, banner advertising, and management of candidate CVs.
Xref is an online reference checking and pre-employment screening company established in 2010, which has managed to find a niche for outsourcing services in the HR sector. The company primarily operates in Australia but also has a presence in Canada, the United Kingdom, New Zealand, and the United States.
