Primavera-led consortium takes control of Zhaopin

Existing investor FountainVest Partners and Zhaopin's management are part of the consortium, which will take a 76.5% stake in the company. Australian recruitment player Seek International expects to receive A$697 million in proceeds, reducing its stake from 61.1% to 23.5%.

Seek, which is transacting via an investment arm, is set to realize a return of more than 5x and an IRR of 23% on its investment, according to a filing. It took Zhaopin private alongside FoutnainVest and Hillhouse Capital in a 2017 transaction that valued the company at about $1 billion.

Seek first invested Zhaopin in 2006 when it was a loss-making and distant number-three player in its segment, providing A$27 million at an implied valuation of A$110 million. By 2013, Seek had built up a controlling interest, providing exits for several VCs. It did not sell any shares in the company's 2014 IPO, which raised $76 million.

Premavera described the acquisition of Zhaopin as a strategic move to increase its exposure to the human resources management space.

The private equity firm, which closed its third China fund in 2019 at $3.4 billion, expects to leverage synergies with its existing portfolio in terms of technological enhancements. The plan is to strengthen capabilities in the local market and investment in smart algorithm-driven technology and professional services.

"The transformation of China's economy, the increasing structural contradiction between supply and demand in human capital, and the impact of COVID-19 pandemic have presented enormous challenges on China's human resource management market," William Wang, a founding partner at Primavera, said in a statement.

"Zhaopin has managed to seize the opportunities brought by the emerging online employment trend and the rapid adoption of SaaS [software-as-a-service] model in the post-pandemic era, delivering solid performance and demonstrating the management's long-term vision and capabilities."

Zhaopin has 230 million individual users, 6.2 million corporate customers, 6.3 million daily active users, and 7.8 million daily job postings on average. The company has characterized its development as a transition from a recruitment website to a "career development platform" featuring a range of adjacent services in areas such as talent development and digital media.

Zhaopin accounted for 48% of Seek's consolidated revenue and 54% of its operating expenses in the 2020 financial year. Seek's sales revenue for the year was about A$1.6 billion, A$749.6 of which was generated in China. This compares to A$1.5 billion and A$647.9 million in 2019.

Primavera has about $10 billion under management across US dollar and renminbi funds. Last month, the firm launched a consumer-facing special purpose acquisition company (SPAC) in the US, targeting a $300 million capital raise.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Media
• Technology
• Buyouts
• China
• Primavera
• Fountainvest Partners