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Japan – Temp Holdings buys rival in USD716m deal

26 March 2013

Japanese recruiter Temp Holdings will acquire all outstanding shares of local rival Intelligence Holdings from US investment firm Kohlberg Kravis Roberts (KKR) in a deal worth JPY 68.0 billion (USD 716 million). KKR originally paid JPY 35 billion (USD 370 million) to buy Intelligence in 2010, with the firm now doubling its value.

According to Staffing Industry Analysts’ research, Temp Holdings (which trades as Tempstaff in Japan) is the second-largest staffing firm in the country with a market share of approximately 5%. Intelligence was ranked the ninth-largest staffing firm but reputedly holds the second-largest share in Japan's permanent job placement market.

This is not the first time that Temp Holdings has acquired Japanese competitors having invested in Kobelco Personnel and Nikkei Staff in 2011.

Analysts have said that the purchase will allow Temp Holdings to diversify its business operations and compete more effectively against market leader Recruit Holdings Co. Nevertheless, following this recent acquisition, Recruit will remain the market leader with a market share of almost 8%.

As well as providing temporary staffing and permanent placement, Intelligence also provides IT outsourcing, BPO and consulting services.

Temp Holdings has been on an expansion drive in Asia with the acquisition allowing the staffing company to diversify further into emerging temporary, permanent and outsourcing markets. Aside from Japan, Temp Holdings operates in China, Hong Kong, Indonesia, Korea, Singapore, Taiwan and the US while Intelligence has a presence in Singapore and China. Temp Holdings will have revenue of over JPY 320 billion (USD 340 million) and more than 10,000 employees after the acquisition.

The US staffing firm, Kelly Services, owns just over 5% of shares in Tempstaff although the company remains firmly under the control of founder and chairman (and one of Japan’s most prominent businesswomen), Yoshiko Shinohara.

Yoshiko Shinohara said: “Under the leadership of CEO Takahashi, Intelligence has grown rapidly as a comprehensive recruitment services provider.

“We believe labor flexibility and mobility will be an important part of improving the competitiveness of Japanese companies and through this partnership we aim to support our customers’ sustained growth by stimulating inter-industry labor mobility, provide stable employment opportunities to jobseekers, and thereby contribute to job creation and better serve our customers.”

The acquisition is currently undergoing regulatory approval and is expected to be completed in late April 2013.

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