The $690 million deal will give Hewitt a broader range of offerings, including recruiting and training.

Paul McDougall, Editor At Large, InformationWeek

June 16, 2004

1 Min Read

Human-resources outsourcing service provider Hewitt Associates said Wednesday it has reached an agreement to acquire rival Exult Inc. for about $690 million in stock. The move creates an HR services giant expected to post more than $3 billion in sales this year.

Executives at Hewitt, which provides payroll and benefits administration services for large companies such as Sony Electronics, say the addition of Exult will give it the ability to deliver a broader range of offerings. Among other things, Exult offers recruiting, employee training, and relocation services. "We're now a one-stop shop for HR outsourcing," says Brian Doyle, HR outsourcing leader at Hewitt. Exult will also bolster Hewitt's presence in Brazil, where the company has a significant market presence, and add to its offshore capabilities in India.

The acquisition of Exult will add about 2,400 employees to Hewitt's existing head count of 15,000. Doyle says there will likely be a small number of layoffs at the administrative level due to the merger. Under the deal, Exult founder and CEO Jim Madden will focus on business development for Hewitt.

Despite the acquisition of Exult, Hewitt still faces stiff competition in the red-hot HR business-process outsourcing market, which will exceed $50 billion in sales this year according to research firm Gartner. IBM is among those that have set their sights on getting a bigger piece of the market. Accenture and other big IT services firms also are increasingly targeting HR services.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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