US employee security company buys former HK start-up Quest Research, founded by two former cops, rides boom in risk management
By Neil Gough , South China Morning Post May 3, 2005

Mumbai-based Quest Research, an employee-screening firm started in Hong Kong five years ago by two former police officers, has been bought by Nasdaq-listed First Advantage Corp for an undisclosed sum.

First Advantage – a Florida-based subsidiary of Fortune 500 firm First American Corp –has a market capitalization of US $ 489 million. It providers risk management services to multinational companies and performs background checks on present and prospective employees.

The deal to buy Quest, brokered by the Indian investment banking arm of HSBC, puts First Advantage in a position to cash in on the burgeoning demand among multinationals for employee-screening services in the Asia – Pacific region.

Quest began in 2000 as a two-man outfit but has grown rapidly and currently has almost 400 employees with offices in Hong Kong, Beijing, Singapore, Perth and four Indian cities.\

Its range of employee-screening services includes verifying educational backgrounds and employment histories, as well as conducting searches of public records.

John Baxter, who founded Quest with Michael Short, says about 70 per cent of the firm’s business comes from multinationals. Core customers are technology and financial services firms. “Most of the large Indian software houses are our clients” says John Baxter, Co-founder, Quest Research.

The explosive growth of the global outsourcing industry, especially in India, has seen the demand for Quest’s services surge. According to research consultancy Gartner, worldwide business process outsourcing is projected to reach US$133.7 billion this year, an 8 per cent increase from last year.” Certainly a large part of our business is on the back of the offshoring boom in India, which has only come to foot in the last few years, “Mr. Baxter said. The increasingly stringent regulatory environment in the United States means American companies doing business in foreign markets are now more likely to conduct background checks on overseas hires.

“The US multinationals have been the first movers in this but now we are seeing a significant number of European companies, too. The next wave, which is already happening, is among Asian multinationals. Most of the large Indian software houses are also our clients” .

In the future, Mr. Baxter hopes to expand to service clients in the manufacturing and oil industries.

The acquisition stands to benefit Quest by providing it access to First Advantage’s cutting-edge search technology, as well as a globally unified online platform for uploading job application data.