On the highly successful Private Equity Summit, a champion in buy and build shared its best practice.
Tekst: Tom Dejonghe | Fotografie Vincent Gorissen
One of the success stories with buy and build is that of House of HR. What started as Accent Jobs & co. today has branches in several countries. During our very first Private Equity Summit, Christophe Quirynen, Head of M&A at House of HR, took us through the growth story. How did House of HR get so big?
"House of HR is one of the leading European companies in HR services", interjects Christophe Quirynen, "It employs more than 73,000 people in more than 34,500 companies, with a focus on SMEs." Just to say, House of HR is a huge name in the HR world. An international success that once started small.
Private equity from the start
For the very beginning, we have to go to the West Flemish city of Roeselare. There, in 1995, entrepreneurs Conny Vandendriessche and Philip Cracco opened a temporary employment agency, Accent. "At that time, it was one of the few Belgian companies that could grow from the start with the support of private equity", Christophe Quirynen explains. "First with family capital, but soon with Gimv as a shareholder."
In 2012, Gimv sold its stake to Naxicap Partners. "With this French private equity player as the main shareholder, we are laying the foundation for our transformation. Accent Jobs becomes the first powerhouse within the group structure of House of HR. 'Powerhouse' because we believe that at Accent Jobs – and today many other powerhouses in our group – lies the strength and drive of House of HR."
Bain Capital
Starting in late 2015, House of HR's growth accelerated with some initial acquisitions. Christophe Quirynen: "Initially, we were buying some platforms in the Netherlands, France and Germany. Later, we added smaller players. Always with strong local management teams, to drive growth."
In 2022 came one of the most important years yet for House of HR. In that year, Naxicap Partners sold part of its shares in House of HR to Bain Capital, which became the new main shareholder at 55 percent. That huge deal with one of the largest private equity funds in the world eventually won an M&A Award in 2022. Rika Coppens, CEO of House of HR, already told us the fascinating story behind this deal.
"At the same time, in 2022 we were making as many as 16 acquisitions, again some platforms and smaller add-ons. With 2023 and 2024 came some calmer years, but with some interesting acquisitions, including for the healthcare sector in Germany."
Entrepreneurs with a growth plan
"We are not an asset heavy business", emphasizes Christophe Quirynen. "We are business driven by people. So, when we make acquisitions, we mainly look at what kind of people we are bringing on board. As I said, we need companies with strong management teams. So, we don't go for companies with a CEO who wants to quit. On the contrary, we are looking for entrepreneurs who have a plan to grow, but are looking for the right partner to do so."
"Under the motto If it ain't broken, don't fix it, we don't completely integrate newly acquired companies into House of HR either. Of course, we incorporate them into House of HR's IT environment. And the company has to report to the group level. But otherwise, we mainly believe in our local brands and teams, which we therefore give a lot of responsibility to, as long as they live up to what they want to live up to."
2 incentive structures
"We improve the companies in our portfolio through further M&A, but also by giving them legal support and by creating communities within House of HR. For example, we regularly bring all CEOs together so that they exchange knowledge and arrive at solutions together, rather than us imposing on them. In this way, we foster a necessary culture of entrepreneurship."
In addition, House of HR encourages local managers with two incentive structures. Christophe Quirynen: "No less than 25 percent of the shares of House of HR are owned by managers from our group. This drives them to look from the group's perspective and to work on growth in the same way. For those who cannot invest in shares of House of HR, we offer a Management Incentive Plan at the powerhouse level. That encourages internal competition: if Bain Capital ever exits, the plan pays you more as a manager if your company contributed more to the overall growth of House of HR."
70 acquisitions since 2015
"Today our group has ten powerhouses like Accent Jobs, more than fifty brands and more than 800 offices mainly in Western and Central Europe. On the one hand, we focus on engineering with, for example, the fast-growing powerhouse ABY in France, an innovative and ever evolving sector, and consulting with, for example, the Dutch House of Cohedron, a full-service provider for the government. On the other hand, we continue to offer specialized talent solutions, including, of course, Accent Jobs. In this segment, for example, we focus strongly on construction and, since 2019, healthcare. In total, we made no less than 70 acquisitions since 2015."
"Already from 2008 we had organic growth of about 8 percent every year. If you then look at the 2019-2023 period, you can see that we have increased that growth by 17 percent. Not only by growing faster organically, but also thanks to our buy-and-build strategy. In total, today we are turning over 3.39 billion euros in revenue, with an ebitda of 11 percent, just over half of which is delivered by engineering and consulting. Our largest market today is the Netherlands, followed by Germany, Belgium and France.
"In the process, we have transformed from purely blue-collar staffing to higher-margin business. For example, IT and telco already make up 10 percent of our turnover, life sciences 8.3 percent, public sector 9.3 percent, ... We have emerged as a global consulting and staffing player that wants to unleash all talents in response to macro-economic trends such as scarcity in the labor market. In doing so, we want to continue to grow in our core countries, but also enter new regions and certainly remain committed to engineering and consulting, which already accounts for 55 procent of our revenue today."
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