Dive Brief:

• Korn/Ferry International is set to buy human-resources consultancy Hay Group for about $452 million in cash and stock, the Wall Street Journal reports.
• The purchase would split the focus of the company evenly between recruiting and human-capital management, with Korn/Ferry offering clients help with organizational design, compensation and leadership development, in addition to hiring, reports the WSJ.
• The Los Angeles-based firm has built its talent-advisory practice in recent years, acquiring companies like leadership training firm PDI Ninth House in 2013 and executive-education company Pivot Leadership in March, according to the Journal. The Hay Group acquisition is Korn/Ferry’s largest yet; talent management currently represents about 30% of Korn/Ferry’s business. The deal is expected to close by the end of the year.

Dive Insight:

Philadelphia-based Hay Group has 3,100 employees who help clients identify high-potential workers, train leaders, write job descriptions and analyze pay and incentives. The company also has pay and skills data for thousands of companies and millions of executives.

Korn/Ferry told the Journal that it is targeting annual cost synergies of at least $20 million within a year of the deal’s closing, and CEO Gary Burnison says layoffs may be ahead for support staff in functions like finance and information technology. The company also plans to combine some offices to save on real estate costs. Korn/Ferry’s 3,900 employees are in 78 offices in 37 countries, while Hay Group’s workers are in 88 offices in 50 countries.

Burnison told the Journal he aims to double the company’s revenue from fees, which topped $1 billion in fiscal year 2015, in the next few years. He sees growth potential in marketing directly to consumers, too, whom he bets will pay to sharpen their skills.

The Journal also reported that employers are ramping up their spending on leadership and manager development, according to a survey from CEB Inc. Fee revenue generated by Korn/Ferry’s leadership and talent consulting business increased by $5.6 million in the quarter that ended July 31, as compared with the same period last year.