Adecco Shrugs Off Brexit Risk To Buy Penna For $149 Million
Adecco SA, the world’s largest provider of temporary staff, agreed to buy Penna Consulting Plc for about £105.3 million ($149 million) as it seeks to expand in the UK market.
Shareholders of Penna will receive 365 pence a share under the terms of the agreed offer, Glattbrugg, Switzerland-based Adecco said in a statement Wednesday. Penna shares closed at that price yesterday, having gained 29 per cent this year.
The UK, together with Ireland, is Adecco’s third largest market and posted a 1 per cent increase in fourth-quarter revenue, the company said in an earnings report. The acquisition comes as the UK debates the merits of being part of the European Union ahead of a June 23 referendum. Executives including Akzo Nobel NV Chief Executive Officer Ton Buechner have said a so-called Brexit will make it more difficult to rotate workers through the U.K.
"Lack of visibility is never good for economic growth and therefore not good for employment," Chief Executive Officer Alain Dehaze said in a telephone interview. "I don’t support Brexit. Europe needs the UK, and the UK needs Europe."
The uncertainty hasn’t had an affect on Adecco’s fourth-quarter results, Dehaze said.
Adecco reported net income of €184 million ($201 million) in the quarter, little changed from a year earlier. Analysts had forecast €213 million, on average, according to data compiled by Bloomberg. That weighed on shares, which fell 1 per cent to trade at 60.50 Swiss francs as of 9:28 am in Zurich, valuing the company at 10.4 billion francs ($10.4 billion).
Recovery in France
Adecco’s largest market, France, recovered over the course of 2015, helping group revenue increase by 5 per cent. French construction returned to growth, while the up tick in logistics, manufacturing and the automotive industries accelerated, Adecco said in the statement.
The Swiss company expects the Penna deal to close in the second quarter.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.