Goldman-backed Russian online recruiter HeadHunter eyes up to $253m in US IPO

HeadHunter Group PLC, Russia’s largest online recruiter backed by Goldman Sachs Group Inc, plans to raise up to $253 million in the US by offering 18.75 million American Depository Receipts (ADSs) on Nasdaq at between $11 and $13.50 a share.

The shares will be sold by existing shareholders ELQ Investors VIII Ltd, a subsidiary of The Goldman Sachs Group; Highworld Investments Limited, a subsidiary of Elbrus Capital Fund II; and Elbrus Capital Fund IIB, according to HeadHunter’s US SEC filing.

The shareholders are offering 16.3 million ADSs with the underwriters – Morgan Stanley, Goldman Sachs, Credit Suisse, VTB Capital, BofA Merrill Lynch, and Sberbank – given the option to purchase up to 2.4 million additional ADSs.

Founded in 2000, HeadHunter provides online recruitment services in Russia, Ukraine, Belarus, Kazakhstan, Azerbaijan, Lithuania, Latvia, and Estonia with a based in Moscow. Goldman Sachs and Elbrus Capital acquired HeadHunter from Mail.ru Group in 2016.

“We offer potential employers and recruiters paid access to our extensive curriculum vitae database and job postings platform. We also provide job seekers and employers with a value-added services portfolio centered around their recruitment needs,” the company said in its prospectus.

As of January 1, 2019, HeadHunter said it was the third most visited job and employment website globally based on the latest data available from SimilarWeb. Its platform contains 36.2 million CVs and a daily job postings of 559,000, excluding Ukraine. It had approximately 253,000 paying customers on our platform for the year ended December 31, 2018.

The company also launched its mobile platform to engage further with job seekers. HeadHunter’s mobile app had been downloaded 15.3 million times cumulatively as of December 31, 2018 and accounted for the majority of its traffic.

Financially, HeadHunter’s total revenue was ₽6.12 billion ($95 million) in 2018 while its net loss was ₽1 billion ($15 million).

“In addition to our growth, we have consistently maintained strong profitability,” the company said. If its IPO pushes through, HeadHunter could become the first Russian firm to test the American market since 2013, according to a Bloomberg report.

The Russian online recruitment market has grown by 28 per cent in 2018 from the previous year, according to a study conducted by J’Son & Partners. The size of the market was approximately ₽10.3 billion ($159 million) in 2018 and is expected to grow at a CAGR of 21.7 per cent from 2018 to 2022 to reach approximately ₽22.6 billion ($350 million) by 2022.

Online recruitment platforms accounted for approximately 23 per cent of total recruitment spend in Russia in 2018 and are expected to reach 46 per cent of total spend by 2022, based on J’Son & Partners’ estimates.

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