Kenexa, StraightSource, RPO

Kenexa Acquires StraightSource

Kenexa® (NASDAQ: KNXA), a leading provider of talent acquisition and retention solutions, today announced it has acquired Dallas-based StraightSource.  For more than 10 years, StraightSource has been providing recruitment process outsourcing (RPO) services to leading Fortune 500 companies. StraightSource offers both comprehensive and modular recruitment solutions through every aspect of the recruitment process.

Kenexa’s Chief Executive Officer, Rudy Karsan, said, “Working together, StraightSource and Kenexa will combine the most experienced recruiters, process consultants and award winning technology and human resource science to create one of the largest and strongest organizations in hiring. By combining shared services, sales and marketing, current customers of both organizations will receive greater support from the collective strength of the two organizations.

The acquisition of StraightSource will provide additional efficiency to Kenexa’s exempt and non-exempt recruitment offering. With its Dallas, Texas area office, StraightSource will expand Kenexa’s geographical reach to better serve customers located in the Dallas metro area and other Southern U.S. locations, while Kenexa’s U.S. and global locations will provide a comprehensive offering of employment branding, talent management, employee assessment, succession planning, analytic tools, and additional support for StraightSource’s current customers.

“This is an exciting next step for both of us”, says Alan Cayton, StraightSource CEO.  “Kenexa is already an award-winning provider in the Talent Acquisition and Talent Management space, and together we’ve significantly raised the bar by creating the most comprehensive suite of solutions available”.

Financial details of the transaction were not disclosed.  The financial results of StraightSource will be consolidated into Kenexa’s overall results beginning in the last month of the second quarter 2007.  As a result, the Company is updating its second quarter guidance to reflect the expected impact from the acquisition.  The Company now expects revenue to be $43.6 to $45.5 million, an increase of $600,000 compared to its original guidance of $43.0 to $44.9 million. 

The Company does not expect the acquisition to have a material impact on its non-GAAP profitability in the second quarter.  As such, the Company’s guidance continues to be non-GAAP diluted earnings per share of  $0.27 to $0.28 for the second quarter of 2007.  The Company expects the transaction to be slightly accretive to its full year 2007 non-GAAP diluted earnings per share, and full year 2007 guidance will be updated when the Company reports its second quarter 2007 financial results. 

Source: Kenexa