
PE investors agree $5.7b 51job take-private

A consortium led by DCP Capital Partners has finalized terms for a $5.7 billion privatization of US-listed Chinese online recruitment platform 51job.
The private equity firm submitted an offer of $79.05 per American Depository Share (ADS) in September 2020, representing a 16.05% premium to the previous close. Since then, other parties have been added to the consortium, including Ocean Link Capital, 51job CEO Rick Yan, and Recruit Holdings, Japan’s largest staffing agency and among the biggest globally.
Recruit’s participation is significant because it is the target company’s largest shareholder with a 35% stake. It takes the consortium’s voting power to 54.9%, according to a filing. Two-thirds shareholder support is required for the deal to proceed.
Up to $1.83 billion in term loan facilities has been secured from banks, with China Merchants Bank and Shanghai Pudong Development Bank as lead underwriters. The rest of the transaction comprises new and rollover equity.
Established in 1998, 51job runs recruitment platforms – 51job.com, yingjiesheng.com, 51jingying.com, lagou.com, and 51mdd.com – and accompanying mobile apps through which job seekers can apply for positions. It also offers value-added services such as business process outsourcing, training, professional assessment, campus recruitment, and executive search.
51job.com, which primarily targets white-collar workers aged 20-35, has accumulated 171 million user accounts and 154 million resumes since inception. The other platforms address more specific candidate groups, based on age and skill set. Lagou, for example, focuses on the internet and technology sector.
The company posted RMB3.68 billion ($565.3 million) in revenue for 2020, down from RMB4 billion the previous year, largely due to COVID-19 hampering customer demand. Net income rose from RMB6.1m to RMB1.1 billion.
Most of 51job’s revenue comes from the recruitment platforms, where employers pay for advertising and marketing services – posting job vacancies and placing banner ads – access to candidate databases and direct communication channels, and recruitment process management tools. Customized private label recruitment websites are also available.
While there have been expectations of more privatization activity involving US-listed Chinese companies – especially given the threat posed to the listed status of Chinese companies by US accounting compliance regulations – not much has materialized. 58.com and China Biologic Products Holdings are the standout deals, at $8.7 billion and $4.6 billion, respectively.
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