SEEK Limited (SEK) announced today that it had agreed to acquire a 25% interest in Chinese online employment firm Zhaopin. The firm said that the investment would cost the firm approximately $26.6 million and was expected to have a small negative impact on earnings per share in FY07.
SEEK said they would provide strategic input and operational support in return for a 25% stake in the online recruitment site provider.
The firm noted that they expect the online employment classifieds market in China, of which Zhaopin is the third largest, to enjoy significant growth in the line of over US$500 million by 2011.
Joint CEO Andrew Bassat said the firm was very excited by the opportunity, Zhaopin had a strong management team and has done an excellent job over the past couple of years gaining market share against better resourced competitors.
ìWe expect that the addition of significant capital plus our ability to add value to the Zhaopin management through our own expertise and experience will ensure that Zhaopin becomes an even more formidable player in what is expected to be a very large market.î
ìSEEK has for some time been looking for opportunities to take significant stakes overseas in internet employment sites as a means of leveraging the expertise developed in the Australian and New Zealand market place,î Mr Bassat added.
The Zhaopin investment represents SEEKís first investment in an internet employment site outside Australia and New Zealand. It follows on from SEEKís acquisition earlier this month of 50% of IDP Education Pty Limited in the training and education market.
Zhaopin’s CEO Hao Liu said that Zhaopin was very impressed by SEEKís management team and their achievements in the Australian recruitment market.
ìWe are confident that with the new injection of capital and knowledge sharing, we will be able to build Zhaopin into the leading franchise in the recruitment space in the fastest growing economy of the world, Mr Liu concluded.
Seek advised that the deal was subject to final agreement on terms and Zhaopin shareholder approval.
At 1100 AEST shares in SEEK were 17c higher at $5.10.
www.seek.com.au
Distributed by Shaw Stockbroking
SEEK acquires 25% stake in Chinese online employment firm
The firm said that the investment would cost the firm approximately $26.6 million
