HR Path, a France-based global provider of human resources (HR), business consulting, outsourcing and integration software and services, is actively pursing acquisitions in the US, Latin America, the Nordics and possibly Germany, said partner Frederic Van Bellinghen.

Targets could range in size from EUR/USD 5m to EUR/USD 20m in terms of annual recurring revenue (ARR), Van Bellinghen said. A member of the firm’s executive board, he focuses on North America and Latin America.

For the fiscal year ended 31 March, the company is projecting around EUR 220m in annual revenue, Van Bellinghen said. The company has experienced 20% annual growth in each of the last three years, roughly half through M&A, he said. HR Path’s aim is to double revenue every five years, Van Bellinghen said. As the company gets larger, it gets harder to do this purely organically so it will rely more on M&A, he added.

On 29 April, the company announced it is in exclusive talks about an investment from Ardian. The proceeds will be used to accelerate the company’s international expansion, according to a press release. Ardian is being advised by Latham & Watkins, Indefi, Eight Advisory, and KPMG Avocats. In March 2023, Wim de Smet, a partner and the head of the US market for HR Path, told Mergermarket it was actively looking for more North American acquisitions.

Last month, the company acquired two businesses: Toronto, Canada-based GroupeX Solutions, a partner of SAP [NYSE:SAP], UKG, WorkForce Software and Dayforce [NYSE:DAY]; and Intelligenza, a SAP, WorkForce and Qualtrics partner in Brazil.
The company continues to be interested in revenue diversification via M&A, Van Bellinghen said. “All of the Americas is a high priority for us,” he added.

In the long term, HR Path wants France and Europe to represent 50% and North America to represent 25%, the partner said. Now, North America is 20% following the two acquisitions, he added. HR Path has a presence in 23 countries. Last year, in addition to Brazil, it added locations in the Czech Republic and Portugal, he said.

In Europe, the company is primarily interested in acquisitions in the Nordics “where we have no presence,” Van Bellinghen said. It could also look in Germany in any of its segments, he added.

HR Path has three business lines: advisory; implementation of HR software and managed payroll and application management services, Van Bellinghen said. The company is in talks with several targets in the US involved with HR advisory services, he said.

The firm is also looking for acquisitions in the Workday implementation services business and payroll outsourcing, the partner said. “We are a global Workday partner,” he said. It is also looking for payroll outsourcing acquisitions in Canada, he said. The recent Latin American deal added 250 employees, Van Bellinghen said. The company continues to be interested in Brazil and the broader Latin American region and is looking at payroll outsourcing acquisitions in Mexico. Chile and Peru are also potential areas for acquisition, he said.

When asked about aspirations for growth in the Asia Pacific, which currently comprises 5% to 10% of revenue, Van Bellinghen said “it’s been difficult over the last two years, to be honest. We want to stabilize the current structure and eventually grow in Australia.” He noted Australia is a very strong economy that is similar to the US and UK. Growth in that market could entail M&A, he added. HR Path sources about 50% of M&A deals directly, with the rest sourced through investment bankers, said Van Bellinghen.

As previously reported, HR Path competes with the Big Four consulting firms – EY, KPMG, Deloitte, and PwC – as well as Accenture [NYSE:ACN], Rizing, Alight Solutions and many regionally focused players. Van Bellinghen added EPI-USE in Latin America to the list. In May 2022, HR Path closed a EUR 225m financing round, including EUR 112m in equity from Andera Partners and a dozen of its subscribers, together with Societe Generale Capital Partenaires. HR Path’s 24 partners still own close to 80% of the company, according to the previous report.