The Charleston technology industry is getting its first major exit of the year with the sale of Engage Talent to an Orlando company owned by one of the nation's largest private equity firms.
The seller is one of Charleston's few artificial intelligence firms that mines thousands of sources of information to help employers hire and retain workers.
It's being acquired by Workforce Logiq, a workforce management company that plans to expand the newly acquired company's Charleston operations. Financial terms of the deal were not disclosed.
The buyer has roughly 1,000 employees and 8,000 supplier relationships. Workforce Logiq is owned by the The Carlyle Group, a publicly traded investment firm with portfolio totaling $235 billion.
Engage Talent CEO Joe Hanna, who founded the company in 2015, said the acquisition will give his employees the opportunity to "focus on what we're good at, which is being geeks and being data scientists."
Hanna said he was not actively looking for a buyer, but the technical backgrounds of Workforce Logiq's leadership appealed to him. The two companies will be a strong cultural fit, he said.
Hanna will join Workforce Logiq as chief strategy officer. He said he will continue to be based in Charleston and will be managing director at Engage Talent.
With a new parent company, Engage Talent is also adding a new skill set. Hanna said the data analytics have focused on analyzing full-time employees so far, and will now evaluate contingent and freelance workers.
Jim Burke, CEO of Workforce Logiq, said the reason for buying Engage Talent boils down to picking up "the ability to be proactive versus reactive." Up to this point, the Florida firm has not had in-house AI capabilities. And Burke hoped to give his customers the tools to predict their workers will do — useful when recruiting and retaining talent.
So, Burke said, his firm set out to buy a company with that kind of expertise about a year ago. They settled on Engage Talent in large part because the firm makes it easy for clients to understand and use its analytics.
"It’s only useful to the extent someone can understand it and act on it," Burke said.
An acquisition usually signals much of the target company's staff being cut loose, but Hanna said that won't be the case with Engage Talent and Workforce Logiq. Both companies said plans call for expanding the firm's footprint in Charleston. Engage Talent currently has about 30 employees and is hiring.
"We were able to put together a team here in Charleston that is very difficult to assemble anywhere," Hanna said. "It would be silly to think about impacting that team now."
As of mid-summer, Engage Talent had reportedly raised a little more than $10 million in investments. Its offices are in the Pacific Box & Crate development on upper King Street.
Its first round of funding, which closed in early 2016, was led by the South Carolina Research Authority and two local investment groups, Meeting Street Capital and Charleston Angel Partners.
Bob Quinn, executive director of SCRA, said his organization's S.C. Launch affiliate has invested roughly $30 million in its 13 years into early stage companies. Not all will make it to an exit.
"Engage Talent is a prime example of the benefits of investing in South Carolina’s innovation economy," Quinn said in a written statement.