Adecco makes a move for German “gem” DIS
The world's biggest employment services firm, Swiss-based Adecco, said on Monday that it is to make an offer for German professional staffing firm DIS.
The company also announced that DIS chief executive Dieter Scheiff and chief financial officer Dominik de Daniel had been offered the positions of CEO and CFO of Adecco.
Adecco says the deal, worth €636 million (SFr981 million), will allow the company to strengthen its position on the German recruitment market, which is one of the fastest growing worldwide.
“This is most likely the best acquisition since forming Adecco in 1996,” said Klaus Jacobs, Adecco’s chairman and chief executive officer.
Adecco, which has its headquarters in Glattbrugg near Zurich, said it was offering €54.50 per DIS share in cash. This represents a 17.3 per cent premium on the three-month average closing price for the Dusseldorf-based company’s shares.
Adecco will also buy the Paulmann family’s 29 per cent stake in the firm at the same share price, which Jacobs said was a “steep” price. It will now make a tender offer for the outstanding shares.
The offer will be entirely financed through debt, said Adecco. The company will fund its offer through a credit line from Switzerland’s largest bank UBS.
Close a gap
Commenting on the deal, Jacobs said the move would allow the company to “close a gap” in Adecco’s worldwide professional staffing offering.
The acquisition of this German “gem” would make the combined company the number two in the German market and allow Adecco to expand its competence in engineering, finance, IT and other areas.
DIS estimates its 2005 sales at €305 million with earnings before tax of €36 million.
“A good strategic move from Adecco,” the equity advisory team at Bank Julius Bär said in a note to clients. “The professional staffing market is the fastest growing segment and has high margins.”
Addeco says the deal, which is still subject to regulatory approval, is expected to have a positive effect on its earnings this year.
The news comes after Adecco forced out its previous CEO, Jérôme Caille, last November after the company posted third-quarter results short of market expectations.
It came after the group discovered accounting difficulties in 2004 which delayed the publication of its 2003 results. This prompted a sharp drop in the share price and a dip in investors’ confidence.
German-born Jacobs, the company’s co-chairman and key investor, took over from Caille, becoming interim CEO and sole chairman. Adecco’s current CFO is to become head of the new professional business line Accounting, Finance, Insurance & Legal in the enlarged group.
swissinfo with agencies
Adecco offers permanent and temporary staffing services in the commercial, industrial and technical sectors.
The group is present in 75 countries.
It employs more than 33,000 full-time staff around the world.
Around 700,000 people are employed worldwide through its temporary staffing services every day.
Adecco was born out of the merger of Switzerland’s Adia and French company Ecco in 1996.
It is the world’s biggest provider of temporary workers.
In 2004 it posted sales of SFr24.5 billion and a net income of SFr470 million.
It intends to spend almost SFr1 billion on acquiring smaller rival DIS.
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