Hudson Global, Inc.: Hudson Global Announces Plan for Strategic Divestitures; Will Focus on Global RPO Business

NEW YORK, 2017-12-17 21:03 CET (GLOBE NEWSWIRE) --
Hudson Global, Inc. (Nasdaq:HSON) ("Hudson"), a leading global talent solutions
company, today announced it has entered into definitive purchase agreements to
sell its recruitment and talent management operations in Europe and Asia
Pacific to strategic buyers in three transactions. Hudson intends to focus on
its growing, global recruitment process outsourcing ("RPO") business going
forward. Under the terms of the agreements, Hudson will receive estimated
proceeds of $41.2 million in cash, subject to adjustment. 

Summary of Transactions

  -- Sale of Hudson's recruitment and talent management operations in Benelux to
     Value Plus NV, in a management buyout led by Ivan De Witte, chief executive
     officer, Hudson Benelux, for $24.7 million in estimated net proceeds,
     subject to customary transaction adjustments.
  -- Sale of Hudson's recruitment and talent management operations in the rest
     of Europe to Morgan Philips Group SA ("Morgan Philips"), for $10.5 million
     in estimated net proceeds, subject to customary working capital and
     transaction adjustments.
  -- Sale of Hudson's recruitment and talent management operations in Asia
     Pacific to Apache Group Holdings Pty Limited ("Apache Group"), in a
     management buyout led by Mark Steyn, chief executive officer, Hudson Asia
     Pacific, for $6.0 million in estimated net proceeds, subject to customary
     transaction adjustments. The buyer will assume the company's short-term
     debt in Asia Pacific, which was $6.3 million as of September 30, 2017.

"We are excited to focus on the RPO business going forward and pleased to have
reached these agreements for the sale of our recruitment and talent management
businesses," said Stephen Nolan, chief executive officer at Hudson. "This
decision is a result of a lengthy and thorough review of our strategic
alternatives and our desire to focus on the growing RPO business. We believe
these transactions are in the best interest of all stakeholders and believe
these transactions will allow each of our business lines to thrive with more
resources, investment and dedicated management than in our existing structure.
I believe our teams will continue to have success under the leadership of Ivan
De Witte in Belgium, Morgan Philips in Europe and Mark Steyn in Asia Pacific." 

A Strategic Focus on RPO

  -- We are excited to operate as an RPO-focused company and look forward to
     continuing to deliver outstanding service to our clients around the globe
     through our regional RPO operations in the Americas, Asia Pacific and EMEA
  -- Hudson believes it has a strong value proposition in RPO and has a deep
     history in this business going back over 18 years as one of the first RPO
     providers in the industry
  -- Hudson RPO delivers high-level, professional solutions around the globe
  -- RPO is a dynamic business with strong growth history and growth prospects
     globally
  -- RPO is less capital intensive than recruitment, requiring less real estate
     and lighter back-office support
  -- RPO has longer-term contracts and is less cyclical than recruitment
  -- As of September 30, 2017, Hudson RPO delivered $58.0 million in revenue and
     $41.6 million in gross margin in the last twelve months
  -- Proceeds from the transactions will be used for investment in the RPO
     business, reduction in support staff costs, other general corporate
     purposes and continuing the existing share repurchase program

Approvals

The transactions are expected to close in the first half of 2018, subject to
the approval of the majority of the outstanding shares of Hudson and
satisfaction of customary closing conditions. Hudson plans to file a proxy
statement with the Securities and Exchange Commission seeking shareholder
approval for the sale of substantially all of its assets as a result of the
proposed sales. The Board of Directors of Hudson has unanimously approved the
definitive agreements for the proposed sales and will recommend the approval of
sales of substantially all of Hudson's assets to Hudson's shareholders. None of
these transactions are contingent on any other transaction in order to close. 

Transitional Services Agreement

Until the close of the sale, all of Hudson's operations, including RPO,
recruitment and talent management, will continue to operate as they do today.
Once the sale process is completed, a transitional services agreement will
allow each division to work together to continue delivering services to clients
throughout 2018, to avoid any service disruptions. 

Net Operating Losses and Stockholder Rights Agreement

Hudson had net NOLs for U.S. Federal tax purposes of approximately $326.3
million as of December 31, 2016. In order to protect the value of the NOLs, the
company has a rights agreement in place that limits beneficial ownership of
Hudson common stock to 4.99%. In addition, stockholders who already own more
than 4.99% of Hudson common stock may not acquire additional shares without
board approval. 

Advisor

Foley & Lardner LLP is serving as legal counsel to Hudson.

About Hudson

Hudson is a global talent solutions company with expertise in leadership and
specialized recruitment, recruitment process outsourcing, talent management and
contracting solutions. We help our clients and candidates succeed by leveraging
our expertise, deep industry and market knowledge, and proprietary assessment
tools and techniques. Operating around the globe through relationships with
millions of specialized professionals, we bring an unparalleled ability to
match talent with opportunities by assessing, recruiting, developing and
engaging the best and brightest people for our clients. We combine broad
geographic presence, world-class talent solutions and a tailored, consultative
approach to help businesses and professionals achieve higher performance and
outstanding results. 

About Value Plus NV

Value Plus NV is a newly formed company led by current Hudson Belgium CEO Ivan
De Witte and an MBO team from the Hudson Belgium management group. The business
is a market leader in Belgium, providing innovative talent solutions to
clients. The business is led by an experienced team of tenured industry
professionals and was founded by expert entrepreneur and pioneer in talent
management Ivan De Witte in 1982. Hudson Belgium has a team of 250 people,
including consultants, researchers, R&D and support staff. 

About Morgan Philips

Established in 2013, Morgan Philips Group has grown to be a major international
recruitment business with offices in Europe, the USA, Latin America, the Middle
East and Asia.  It specializes in executive search, permanent and temporary
recruitment, interim management and talent management.  Morgan Philips is
particularly noted for its digital approach to executive search and recruitment
with a number of online tools and applications, including video CVs and talent
matching apps. 

About Apache Group

The newly formed company is led by current Hudson Asia Pacific CEO Mark Steyn
and an MBO team with 76 years' combined tenure in the business. There is a team
of over 675 employees working across 16 offices in five countries. The business
will retain the Hudson brand locally, capitalizing on strong customer
partnerships and building upon a 30 year track record in Australia, over 26
years in New Zealand and a 17 year track record in Asia. 

Forward-Looking Statements

This press release contains statements that the company believes to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact included in this press release, including statements regarding
the company's future financial condition, results of operations, business
operations and business prospects, are forward-looking statements. Words such
as "anticipate," "estimate," "expect," "project," "intend," "plan," "predict,"
"believe" and similar words, expressions and variations of these words and
expressions are intended to identify forward-looking statements. All
forward-looking statements are subject to important factors, risks,
uncertainties and assumptions, including industry and economic conditions' that
could cause actual results to differ materially from those described in the
forward-looking statements. Such factors, risks, uncertainties and assumptions
include, but are not limited to, Hudson's ability to complete the sales of its
recruitment and talent management operations in Europe and Asia Pacific on
anticipated terms and timetable; the possibility that various closing
conditions for the proposed sales may not be satisfied or waived; Hudson's
ability to obtain shareholder approval for the sale of substantially all of its
assets as a result of the proposed sales; Hudson's ability to achieve
anticipated benefits from the proposed sales and operate successfully as a
company focused on its RPO business; global economic fluctuations; the
company's ability to successfully achieve its strategic initiatives; risks
related to fluctuations in the company's operating results from quarter to
quarter; the ability of clients to terminate their relationship with the
company at any time; competition in the company's markets; the negative cash
flows and operating losses that may recur in the future; restrictions on the
company's operating flexibility due to the terms of its credit facilities;
risks associated with the company's investment strategy; risks related to
international operations, including foreign currency fluctuations; the
company's dependence on key management personnel; the company's ability to
attract and retain highly skilled professionals; the company's ability to
collect accounts receivable; the company's ability to maintain costs at an
acceptable level; the company's heavy reliance on information systems and the
impact of potentially losing or failing to develop technology; risks related to
providing uninterrupted service to clients; the company's exposure to
employment-related claims from clients, employers and regulatory authorities,
current and former employees in connection with the company's business
reorganization initiatives and limits on related insurance coverage; the
company's ability to utilize net operating loss carry-forwards; volatility of
the company's stock price; the impact of government regulations; restrictions
imposed by blocking arrangements; and risks related to potential acquisitions
or dispositions of businesses by the company. Additional information concerning
these and other factors is contained in the company's filings with the
Securities and Exchange Commission. These forward-looking statements speak only
as of the date of this document. The company assumes no obligation, and
expressly disclaims any obligation, to update any forward-looking statements,
whether as a result of new information, future events or otherwise. 

Important Additional Information and Where to Find It
This communication does not constitute a solicitation of a vote or proxy. In
connection with the proposed transaction, Hudson intends to file relevant
materials with the SEC, including a proxy statement. INVESTORS ARE URGED TO
READ THE PROXY STATEMENT AND ANY OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HUDSON AND THE
PROPOSED TRANSACTION. The proxy statement and certain other relevant materials
(when they become available) and other documents filed by Hudson with the SEC
may be obtained free of charge at the SEC's website at http://www.sec.gov. In
addition, investors may obtain copies of these documents (when they become
available) free of charge by written request Hudson Global, Inc., 1325 Avenue
of the Americas, 12th Floor, New York, New York 10019 or by calling (212)
351-7300. 

Participants in the Solicitation
Hudson and its executive officers and directors may be deemed to be
participants in the solicitation of proxies in connection with the proposed
transaction. Information about the executive officers and directors of Hudson
and the number of shares of Hudson's common stock beneficially owned by such
persons is set forth in the proxy statement for Hudson's 2017 annual meeting of
stockholders which was filed with the SEC on May 1, 2017, and Hudson's Annual
Report on Form 10-K for the period ended December 31, 2016. Investors may
obtain additional information regarding the direct and indirect interests of
Hudson and its executive officers and directors in the transaction by reading
the proxy statement regarding the transaction when it becomes available. 

         Contact:
         David F. Kirby
         Hudson
         212-351-7216
         [e-mail]