Recruiting Gold: Mergers and IPO Reports

In my article last month, we looked at some of the obvious uses of layoff reports and talked about some internal controls they offer. But today it’s Friday, and lo and behold, there’s more gold in the inbox. It’s merger and IPO report day. Now I must confess that the my first acquaintance with these reports in was in May 1999. The only source I knew of was AIRS, along with its other news products. So my words are somewhat biased in regard to where to look for this information. The next place that’s outstanding for information about the latest IPOs seems to be CNBC’s IPO Center. I’ll talk about that one in a bit. Panning for Gold First of all, you have to realize these reports about mergers and initial public offerings have sources. What are those sources? Well, newspaper reports for one. Press releases for another. In regard to sales of securities, you can get the information directly from the Department of Corporations for each state or the SEC. The Secretary of State will have copies of the new charter documents that authorize and memorialize mergers. Don’t get the fool’s gold here. This source is of limited value for getting the scoop on mergers. It’s really time consuming to go through those for a broad overview of what’s happening in the business marketplace. What’s really important is who’s combining and eventually going to reduce redundancies. So the AIRS Mergers & IPO report is about the best distillation of the information that I’ve found. After all, for recruiting purposes, what you primarily want to know is where the candidates may be. Combine the Friday merger report with the Monday layoff report and you’ve got a pretty good idea of what’s going to be happening and where. Simply put, you’re panning for the gold of eligible and available candidates from reading the mergers reports. Check the Grains But these are more than layoff forecasting documents. Take a look at who’s aligning with whom. There may be some new corporate direction about to take place that will also mean talent to drive it home. That will require not only staff but management as well. That will mean planners, developers, strategizers, and the ever-necessary do-ers will be added in the near future. Consider the implied opportunities in this part of the report. In other words, these merger reports have hidden grains of gold in them that can give you an idea of future staffing needs and business development. Also notice where the plants will be after the merger is completed. This is critical for knowing whether the surviving corporation is growing, taking a temporary reduction, or maintaining its footprint. If they’re leaving an area, that may mean relocation expenses need to be part of the bargaining package discussions. Determining what the company is capable of spending will help you put together the right situation for everyone. Consider how much the deal is worth. That information is in the merger report for each company. Take a look at whether it’s cash, stock, plant and equipment, or a combination of those. Although a deal is worth several hundred million, if it’s all plant and equipment, it’s book value. Cash resources are being used in a different area and in a different way. The availability of funds for cushy salaries may not be there. So other factors affecting placement will be important, such as stock option plans, health and other benefits, signing bonuses, and the like. There’s quite a bit of gold grains in these reports. It’s worth your while to spend a little while examining the companies in your target market and industry. Number of Carats The next issue is who’s getting funded and how that funding stands. To get those answers, the AIRS Merger and IPO report does a magnificent job of setting forth the name of the company with a brief description of its business, its location and industry, and the number of employees. While the size of the offering isn’t provided, it does give you the initial information about upcoming funding and who’s getting stronger. The IPO reports deliver even more subtle information about what’s happening within a company. Says Beth Roussel, director of AIRS News, “Companies that launch public stock offerings are looking for a fast infusion of cash and value.” Immediate cash and strength are great pieces of information to have. As Roussel continues, “Being a publicly traded company may help [the company] secure other types of financing, may bring greater value to the stock options they offer promising recruits, and may give them the capital needed for expansion and growth.” Well, I said I’m a bit biased about these reports from AIRS. Okay, why do these two reports that seem so diametrically different from one another get combined into one report on Fridays? That’s a good question (I knew you’d want to know that). Roussel explains, “By going public, companies also need to be responsive to the wishes of their stockholders. If the public company wants to merge with another company, but they don’t receive shareholder approval, that particular merger will be blocked.” Thus we have a glimpse of why the merger report piggybacks with the IPO. Supplementing that, Roussel continues by saying, “If the company turns in a weak quarterly earnings report, there’s a string chance that jobs may be cut in order to reduce costs.” A-ha! And now we see how the three reports coordinate. Testing the Weight Although I’m partial to AIRS’s reports, for even more comprehensive IPO information and forecasting tools I like the IPO Center at CNBC. Now this is a gold bar in and of itself. It’s derived from Hoover’s Online. Need I say more about its thoroughness and accuracy? By using the information through CNBC, the full comprehensiveness of the Hoover’s site may not be available to you, but you can get a lot of the same resources without the subscription fee. It’s one thing to know that a company is seeking funding through an offer of its shares. That information is readily available at the IPO Center. AIRS also does a great job of telling you what’s new on the market. But the IPO Center goes into more depth, should you want it. And trust me, you want it. That initial news is great because it provides a stepping-off point about who to watch. Go to the IPO Center to find out how that offering is doing. Find out the performance of the offering, whether it’s gained in offering price or dropped. These are also indications of what type of packages can be developed. You can check for the newest offerings on the market as well as those that are due within the next six weeks, their projected pricing, and which have been postponed. Incidentally, the “Computer Software & Services” industry is the one that’s having the most activity right now. So don’t think that because of our current conditions the bottom has dropped out of that market. Computers and software are, of course, part of our necessary path into the future of everything we do. Another reason I like the IPO Center is because, in addition to all of these weighty gold bars, it has an online IPO tutorial. If there’s a particular nuance of IPOs that you’d like to understand a little better before making your presentation, you can brush up on it here while grabbing all of the other information necessary for putting together the right package for both the client and the candidate. Business Development Basics Okay, I’ll put my pocket protector away. You weren’t supposed to see that. But these reports are significant for more than just figuring out how to get bodies to Company A from Company B. These reports are significant in helping you develop your business and make good business decisions. If the IPO gets pulled, you have to consider whether the funding was mandatory for the life of the company or not, and how long it may take for them to reconnoiter. For third-party recruiters, these help determine the strength of the potential client and the potential value of a relationship. If the merger is a retrenchment, consider whether this situation is going to be worth the outreach in the long run. The obvious of the merger and IPO reports and the layoff reports are where the candidates are. The more subtle issues of finding potential clients and running your business in a business-like manner are other aspects of using these reports. Either way, it’s no understatement to say these reports are goldmines in all your recruiting efforts.