SHL Group Limited and PreVisor, two major providers of employee psychological tests and job candidate screening services, merged this morning, forming a $190 million concern with 850 workers.
The two companies are held by private-equity firms and terms of the deal were not disclosed. The combined entity, which will go by the name SHL worldwide and SHLPreVisor in the U.S., will be headquartered in London and run by current SHL Chief Executive David Leigh.
"The fit between the two businesses is pretty incredible," Leigh said. "It really ups the stakes in the whole talent management space."
Last year, SHL and PreVisor employed 300 trained psychologists and administered more than 15 million assessment tests. Although both companies saw business decline in 2009, the fallout of the crisis boosted returns in 2010. Companies increasingly turned to third-party screeners as their decimated human resources departments struggled to filter huge volumes of resumes.
"There has been kind of a double-effect," said Caroline Paxman, chief customer officer of Previsor and president of the Americas at the combined firm. "They really got our data, they got our value and they got ROI."
Many firms also hired SHL and PreVisor to analyze and redeploy their remaining workforces test incumbent employees for a new set of skills, including resilience, adaptability and creativity.
"The kind of person you want working in a credit department at a bank, for example, is totally different today from what you would be looking for five years ago," Leigh said. "Today, you're looking for a much more conservative mix of risk and reward. It's not about saying someone is good or bad," Leigh said. "It's about saying if someone is right or not right."
There is relatively little overlap in the two companies and Leigh expects to cut fewer than 10 of the combined 850 employees. SHL, which recorded about $135 million in revenue last year, focuses on finding and filtering senior and executive-level candidates all over the world. While, PreVisor, with $55 million in annual revenue, does most of its business in the U.S.
SHL is owned by Hg Capital, a UK-based private-equity firm, while PreVisor is owned by Veronis Suhler Stevenson, a buyout and mezzanine-finance firm with offices in New York and London. Though SHL and PreVisor declined to detail financial performance, Leigh said the pair increased net revenue by 20% last year and grew net income by even more.
PreVisor Chief Executive Noel Stitzmann is stepping aside, though he will remain a shareholder in the new firm.
Write to Kyle Stock