The price reflects the deterioration in the marketplace since Heidrick & Struggles, one of the world's biggest headhunters, agreed a 15m price tag for Baines Gwinner in early 2000. The acquisition fell through due largely to problems of integration.
Whitehead Mann will pay for Baines Gwinner in a mixture of its shares and loan notes, as well as 250,000 in cash.
Whitehead Mann's stock rose 0.9% on the announcement to close at 285p on November 20th and a price of 11m is based on that figure. The share price was 247.5p just before Whitehead Mann announced it was planning to buy the firm earlier this month, which would have valued Baines Gwinner at 9.95m.
A strong financial services market in 2000 contributed to Baines Gwinner's 15.5m turnover and profit before tax in the year ended 30 November. Whitehead Mann said that although market conditions had been more difficult this year, Baines Gwinner was still likely to perform better than in the year ended November 30, 1999.
The firm's founder, Jonathan Baines, and other senior consultants at Baines Gwinner are locked in to stay at the expanded Whitehead Mann for three years under the deal. Under the Heidrick plan, the lock-in period would have been four years.