Randstad Acquisition Frenzy… This Time in North America Acquiring SFN Group

A pretty big acquisition happened last week in the staffing and recruiting industry. Here is the backdrop.

On July 20, 2011, Randstad announced that it is going to acquire SFN Group to expand in North America. Randstad is headquartered in the Netherlands and SFN Group in the United States. It is a cash tender offer at $14 per share. Approved by both boards, the acquisition, now subject to regulatory approvals and a tender offer of at least 50% of SFN Group’s outstanding shares, equates to ~$771m. This is a premium of 53% over SFN Group’s closing share on July 19, 2011. The acquisition is expected to close in September 2011.

The Randstad Group will have combined revenues of ~$22bn / €17bn (pro forma as of March 31, 2011). In North America, the combined company will have $4.6bn in revenues (pro forma as of March 31, 2011) from the following service segments:

  • 52% Staffing
  • 39% Professionals
  •   9% HR Services including payroll, managed services, and RPO.

Randstad, who already has sizeable revenue in North America, now becomes a major force. Randstad, which had full year 2010 revenues of €14,179m, obtained 13% of its revenues (or €1,848m) from North America, which equates to over $2.6Bn. The SFN Group had full full year revenues of $2,053m. Approximately 80% of Randstad’s 2010 revenues were in Europe.

So, is Randstad trying to conquer the staffing world via acquisitions? Its last acquisition was in August 2010, acquiring FujiStaff Holdings to strengthen its presence in the Japanese staffing market. Since 2006, Randstad has merged and partnered with five other companies in Japan to provide staffing services that include temporary and permanent hires, contract staffing, and internal recruiting for industries that include healthcare, real estate, and construction. Since 2005, Randstad has been acquisitive elsewhere  in growing its staffing business including in:

  • U.K.
  • Germany (3)
  • Netherlands
  • China
  • Switzerland.

Randstad now also picks up SourceRight Solutions’ RPO business, which NelsonHall estimated as the third largest RPO provider in North America in its 2011 RPO market analysis report. SourceRight’s RPO business has had significant year-over year revenue growth in H1 2011. Its RPO business has primarily been in North America, but expect for it to expand into Europe by 2012. More to follow in a future blog…

Gary Bragar,  HR Outsourcing Research Director, NelsonHall

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Explore posts in the same categories: Acquisitions, hr outsourcing, hr outsourcing research, hro, HRO Staffing, nelsonhall, recruitment process outsourcing, RPO providers

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