Swedish staffing firms Poolia and Uniflex have announced an agreement to merge to create a Nordic staffing powerhouse.

The boards from each firm unanimously decided on the merger and plan to have each share in Uniflex replaced with 1.7 new shares in Poolia.

The merger is subject to approval at the extraordinary general meeting of each company in July and is expected to be completed in October 2018. Until then both companies will continue to operate as two independent firms.

Both companies reported stable revenue during Q1 2018 but struggled to improve profitability. Poolia reported that operating profit declined 31.4% to SEK 4.8 million (€0.4 million) in Q1 2018 while Uniflex saw a decline of 21.1% to SEK 5.6 million (€0.5 million).

Uniflex was founded in 2002 as a subsidiary of the Poolia Group and in 2004 it became an independent company.

Major shareholders representing 61.4% of the capital and 80.1% of the votes in Poolia as well as major shareholders representing 62.2% of the capital and 80.4% of the votes in Uniflex are in favour of the merger.

After the merger completes, the new group will continue with the Poolia AB name and trading will only take place with the class B shares in Poolia, however both Poolia and Uniflex will continue to operate under separate brands and retain their respective strategies and goals. . According to Poolia, the new merged company will be ‘strong’ and have a wide range of crew and recruiting services in Sweden, Finland, Norway and Germany, with an estimated total turnover of approximately SEK 1.935 billion (€188.6 million) (excluding estimated revenue synergies) for the full year 2017.

“The purpose of the proposed merger is to maximize value creation through higher growth and profitability and thereby make the merged company an even more attractive company for customers, employees and shareholders,” a statement from Poolia read. “Poolia's vision is that the group will continue to offer attractive options for companies with temporary or permanent workforce needs after the completion of the merger,”

Meanwhile, Jan Bengtsson, CEO of Uniflex, is set to become the President and CEO of the newly merged company. Poolia CEO Morten Werner will be stepping down from the company.

Calculated on the basis of Poolia’s share price on 1 June 2018, at 11.90 SEK (€1.16), the total merger consideration amounted to approximately SEK 351 million (€34.2 million).

Björn Örås, who is set to be Chairman of the new Board for the merged company, commented, "I am very pleased that we have agreed on a merger of the companies, a deal with strong industrial logic which will strengthen both companies' position in the staffing industry.”

Jan Bengtsson, President and CEO of Uniflex, also commented, "Together, Poolia and Uniflex make up a strong player who can offer the services required to succeed in a competitive market. The companies complement each other well.”

“Together, we offer a broader range of services with enhanced geographic presence while we can take advantage of the benefits of each company,” Bengtsson said. “We become a more attractive partner to our customers which together with a strengthened joint market organisation creates good conditions for increased sales. A combined Poolia and Uniflex also create better opportunities for employees to grow and develop.”

Werner, also commented, “A merger with Uniflex is a natural next step in Poolia’s development and I am convinced that a merger will be positive for Poolia’s customers, employees and owners. Through the co-operation, further efforts will be made on digitisation and modernisation technology, which will place the merged company in the forefront of the industry.”