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Switzerland — Adecco to acquire MPS Group

20 October 2009

Adecco Group (ADEN:VTX), the world's largest provider of HR solutions, announced today the acquisition of MPS Group Inc. the professional staffing services group, for 782 million Euro or $13.80 per share.

The acquisition will significantly enhance Adecco's position in the professional staffing business, particularly in the USA, Canada and the UK.

Patrick De Maeseneire, Chief Executive Officer of the Adecco Group comments, "the acquisition of MPS Group is an important step in Adecco's stated strategy to strengthen the higher margin professional staffing business, which offers attractive growth over the coming years. With this transaction and the successful closing of the Spring Group acquisition (announced yesterday), Adecco's revenue mix is significantly improved with close to 25% of group revenues to be generated in the professional staffing business. This is up from 17% of group revenues based on 2008 results."

MPS Group provides specialty staffing, consulting, and business solutions across various professional business lines such as information technology (Modis, Idea Integration), finance and accounting (Accounting Principals and UK-based Badenoch & Clark), legal (Special Counsel), engineering (Entegee) and healthcare (Soliant Health).
MPS Group is one of the largest professional staffing firms in North America and also has a strong position in the UK. In 2008, MPS Group generated revenues of 1.5 billion Euro. MPS Group achieved an average EBITDA margin of 6.3% between 2004 and 2008.

Acquiring MPS Group enhances Adecco's Managed Service Program (MSP) and Recruitment Process Outsourcing (RPO) offering through MPS Group's technology platform (Beeline). Together, both companies will become a leading provider of MSP and RPO services and technology solutions.

The flexibility to offer services, technology or combined programs is increasingly becoming a strategic advantage within the HR industry as clients seek to outsource HR processes and to streamline their supplier relationships.

The combination of Adecco and MPS Group offers synergy potential through optimisation of the combined footprint and operational / back-office functions, efficiency improvements and elimination of public company costs.

Adecco expects to achieve 25 million Euro of annual synergies from the integration of MPS Group within two years, representing approximately 0.5% of the pro-forma 2008 revenues of the USA, Canada and the UK. Integration costs are expected to amount to approximately one times the annual synergies.

MPS Group's board of directors unanimously recommends Adecco's proposed offer to its shareholders. Adecco is strongly committed to pursue a multi-brand strategy including MPS Group's portfolio of leading professional staffing brands.

Under the terms of the acquisition agreement, it is proposed that MPS Group shareholders will receive USD 13.80 in cash for each outstanding MPS Group share the 'Offer', representing a premium of 24% to the closing share price of USD 11.14 on October 19, 2009 and a premium of 27% to the volume weighted average share price of USD 10.87 over the 30 days through to October 19, 2009. On an enterprise value basis, the Offer is EURO 782 million, representing an enterprise value/revenue multiple of 0.5x based on MPS Group's 2008 revenues and an enterprise value/EBITDA multiple of 9.9x based on the average EBITDA over the last five years.

The transaction will be financed by Adecco's current cash resources as well as existing financing capabilities. The transaction remains subject to the MPS Group shareholder vote and regulatory approvals. It is expected to close in the first quarter of 2010.

In its analyst call this morning the company announced that it would not be perusing other M&A opportunites but would be looking to organic growth for the next two years. This is likely to affect both USG People and Brunel International, who saw their share price increase 30.15% and 29.16% repecivelty in September following speculation of a bid by Adecco.

By 11:24 (CET) Adecco's shares on the Swiss Exchange were down - 3.66%. USG was down 7.7% and Brunel International was down 3.2%



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