Adecco Shrugs Off `Brexit' Risk to Buy Staffing Company Pennaby
Penna shareholders offered 365 pence-a-share by Adecco
Adecco stock falls as fourth-quarter net income lags forecasts
Adecco SA, the world’s largest provider of temporary staff, agreed to buy Penna Consulting Plc for about 105.3 million pounds ($149 million) as it seeks to strengthen its No. 1 position in the U.K. market.
Britain, which on June 23 will vote on whether to stay in the European Union, remains a strategic market for Adecco in spite of the upcoming referendum, Chief Executive Officer Alain Dehaze said, adding that the company is looking for other opportunities there. Adecco agreed to pay 365 pence a share for Penna, 62 percent higher than the average price over the past 12 months.
The acquisition comes as European business leaders 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. Britain, together with Ireland, is Adecco’s third-largest market and posted a 1 percent increase in fourth-quarter revenue, the company said in an earnings report.
“Lack of visibility is never good for economic growth and therefore not good for employment,” Dehaze said in a telephone interview. “I don’t support Brexit. Europe needs the U.K., and the U.K. needs Europe.”
The uncertainty leading up to the referendum could be more damaging to the U.K.’s staffing industry than the outcome itself, deterring employers from making investment decisions or employees from moving jobs, Penna CEO Gary Browning said by telephone.
“From a staffing perspective, we have always been blessed in the U.K. to have a highly flexible labor market allowing everything from permanent people to temporaries to interims and contractors. We do well when there is lots of mobility in employment markets.”
The Penna deal is expected to close in the second quarter, Glattbrugg, Switzerland-based Adecco said in a statement Wednesday.
Recovery in France
Adecco reported net income of 184 million euros ($201 million) in the quarter, little changed from a year earlier. Analysts had forecast 213 million euros, on average, according to data compiled by Bloomberg. That weighed on shares, which fell almost 3 percent before recovering losses to trade 1 percent lower at 60.70 Swiss francs as of 12:00 p.m. in Zurich.
Adecco’s largest market, France, recovered over the course of 2015, helping group revenue increase by 5 percent. French construction returned to growth, while the up tick in logistics, manufacturing and the automotive industries accelerated, Adecco said in the statement.