By Staff Report
Jul. 21, 2011
Randstad Holding, the world’s second-largest staffing firm, plans to acquire SFN Group Inc., the world’s 13th-largest staffing firm. The combined company would be the third largest staffing firm in the U.S.—Randstad currently ranks No. 6 and SFN Group No. 7—based on 2009 estimated U.S. staffing revenue.
Randstad plans to pay $14 per share equaling $771 million for SFN, the company reported. The transaction must still be approved by SFN shareholders, but SFN’s board has unanimously approved the deal.
The deal is expected to close in September, according to Randstad.
The companies had combined North American revenue of $4.6 billion in the last 12 months as of March 31, according to Randstad. Total revenue at Randstad in the past 12 months, on a pro forma basis including SFN, would total $22 billion.
Based on 2010 revenue of both firms, the deal would make Randstad the second-largest information technology staffing provider in the U.S. It could also become the second-largest provider of office clerical staffing.
“SFN Group is a great company with professional and dedicated people, a good match with Randstad,” the company’s CEO Ben Noteboom said in a written statement. “The future combination will increase opportunities for growth and development of all employees. And by sharing best practices and leveraging the cross selling potential, we will be well-positioned to offer our clients and candidates an unrivaled portfolio of services.”
SFN Group president and CEO Roy Krause said in an interview July 20 it will be business as usual at SFN for the next 60 days. While the deal still needs shareholder approval, the management team at SFN is committed to making this work as a combination, he said. In addition, plans call for Krause to be involved in the integration of the companies.
“This has happened very quickly,” Krause said. The company wasn’t up for sale, but Randstad approached it with an offer and the board evaluated it, he said.
“I think it will give a great opportunity for our employees and our customers,” Krause said. A significant number of U.S. companies have large operations overseas, and this merger will allow them to get worldwide services from the combined company, he said.
Randstad posted revenue of $18.8 billion in 2010, according to its annual report. It had 521,300 staffing employees and 3,085 branches and 1,110 on-premise sites. Based in the Netherlands, Randstad operates in 43 countries.
It’s expected the SFN deal would create $30 million in annual run rate pretax cost synergies. The deal would also be immediately accretive to Randstad’s earnings. Randstad plans to finance the deal under its existing credit facility with a group of seven banks.
Randstad’s last major acquisition was in October 2010 when it acquired FujiStaff of Japan, the world’s 38th-largest staffing firm, which had revenue of $620.2 million in its fiscal year ended March 31, 2010. However, in 2008, it acquired Vedior, at that time the fourth-largest staffing firm in the world, for $5.4 billion in cash and stock.
SFN, based in Fort Lauderdale, Florida, posted revenue of almost $2.1 billion in 2010. It had a network of 559 locations in the U.S. and Canada in 2010, according to its annual report.
Its operations include temporary staffing (both professional and commercial), direct hire, managed service provider service and recruitment process outsourcing.
Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, email firstname.lastname@example.org.
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