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Staffmark, the 14th-largest U.S. staffing firm, is being acquired by Recruit Co. Ltd., a Tokyo-based staffing and publishing firm. The deal gives Staffmark an enterprise value of $295 million. Plans call for Staffmark to continue operating under its owned brand and for its headquarters to remain in Cincinnati.
The majority owner of Staffmark, Compass Diversified Holdings, announced the transaction today.
Recruit ranks No. 6 on Staffing Industry Analysts’ 2011 list of largest global staffing firms with 2010 global staffing revenue of $4.50 billion. Staffmark posted 2010 global staffing revenue of $1.00 billion.
“Recruit analyzed a number of staffing companies across the United States, and we were extremely impressed with Staffmark’s growth and performance, as well as their high level of commitment to their customers and employees,” said Hitoshi Motohara, chairman and director of Recruit Co. Ltd. “As we continue to grow internationally, we believe Staffmark’s leadership team and quality of services will be an excellent platform on which to expand our operations in the United States.”
The deal marks the second publicly announced U.S. acquisition for Recruit. In August 2010, Recruit bought The CSI Companies, a Jacksonville, Fla.-based staffing firm.
Staffmark operates more than 190 branches in 29 states and primarily provides commercial staffing, according to its annual report filing with the U.S. Securities and Exchange Commission. In 2010, light industrial staffing represented 72 percent of the company’s temporary staffing revenue. Clerical/administrative staffing represented 18 percent.
“We are excited to join Recruit and become part of one of the global leaders in our industry,” said Staffmark President and CEO Lesa Francis. “We believe our newly combined company will be able to offer additional resources and expertise to our customers.”
Staffmark posted revenue of $251.4 million in its second quarter ended June 30, an increase of 1.7 percent on a year-over-year basis.
The Staffmark brand represents the new name for three companies that previously operated under separate brands — CBS Personnel, Staffmark and Venturi Staffing. The companies combined under the Staffmark name on Feb. 27, 2009. The move followed CBS Personnel’s acquisition of Little Rock, Ark.-based Staffmark in the first quarter of 2008. CBS was majority owned by Compass Diversified.
At one time it appeared that Staffmark might be spun off from Compass Diversified as a separate publicly traded company. A registration statement for an initial public offering of Staffmark stock had been filed on April 12, 2011.
Recruit’s acquisition of Staffmark continues a trend of overseas firms buying U.S.-based staffing companies. Randstad Holding NV of the Netherlands acquired U.S.-based SFN Group Inc. in September. Groupe CRIT, a Paris-based staffing provider, acquired a 75 percent state in PeopleLink LLC of South Bend, Ind., also in September.