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Recruit strikes $1.6 billion deal for Dutch staffing firm USG

December 22, 2015

Recruit Holdings Co. Ltd. agreed to acquire Dutch staffing firm USG People NV for €17.50 per share or €1.42 billion (US$1.55 billion). Both firms rank among the largest in the world with USG’s operations in Europe; Recruit is based in Japan with operations in Asia, the US, Australia and UK.

“Recruit’s offer to join forces with our organization brings attractive perspectives for all our stakeholders,” USG People CEO Rob Zandbergen said. “A combination with Recruit, a successful global organization, provides the opportunity to accelerate our growth and innovation development and to strengthen our position in continental Europe considerably.”

USG founding shareholder Alex Mulder agreed to tender his 19.8% stake in USG, and the company’s management board and supervisory board endorsed the deal.

The move marks another acquisition for Recruit, which has a stated goal of being the No. 1 global HR business by 2020.

Plans call for a memorandum to be approved by Dutch regulators in March then for a tender offer for shares to launch in March as well. The deal could close between April and June. Recruit intends to fund the acquisition through a combination of cash and debt.

Recruit already operates a number of brands including job board Indeed and staffing firms Staffmark, AdvatageResourcing and The CSI Companies in the US. It operates its Recruit staffing business in Japan and Bó Lè Associates, an executive search firm in Asia. Recruit also operates Australian brands Chandler Macleod Group and Peoplebank Holdings. In addition, Tokyo-based Recruit has publishing and media operations in Japan.

“Following our acquisitions in the United States, the United Kingdom and Australia we are now taking the next step by entering the continental European market,” Recruit Chairman and CEO Masumi Minegishi said. “We are excited by USG People, which we see as a strong business that operates fantastic brands and has a deep understanding and expertise of the markets it operates in. Together with USG People, we aim to become a recognized industry leader in Europe.”

Based on 2014 revenue of $6.52 billion, Recruit presently ranks as the world’s sixth-largest staffing firm, according to Staffing Industry Analysts.

The USG acquisition would give Recruit a much larger footprint in Europe. USG operates primarily in four European countries with 43.0% of net sales coming from the Netherlands, 26.5% from Belgium, 20.6% from France, 9.6% from Germany and 0.3% from elsewhere.

USG posted revenue of $3.12 billion in 2014, making it the No. 12 largest staffing firm in the world. And a majority, 59.8%, of the Almere, Netherlands-based firm’s net sales is in general staffing, which includes a focus on large clients for which it can provide in-house services.

USG also gets 33.7% of sales from specialist staffing (focused on small and midsize companies) in financial, HR, secretarial and technical workers; 6.3% from professional staffing; and 0.3% from online business solutions.

USG’s brands also include Start People BV and Unique NV.

Recruit’s acquisition of USG follows a string of other acquisitions, such as Staffmark in 2011 and Advantage Resourcing in 2011. It acquired Indeed in 2012.

Recruit has also made a number of investments recently in technology firms, including DataRobot in Boston, Atlanta-based online lending website Kabbage and online payments firm Align Commerce Corp. of San Francisco.

Recruit held an initial public offering in October 2014.