Walters falls to pounds 110m US bid

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The Independent Online
YET ANOTHER British staffing firm fell into American hands yesterday as Robert Walters, the recruitment agency, agreed to a pounds 110m takeover bid from StaffMark, its larger US rival.

The deal marks a growing trend towards cross-border consolidation in the recruitment industry as firms try to offer a one-stop shop service to multinational clients. Early yesterday Morgan & Banks, an Australian firm, announced an A$340m (pounds 126m) merger with US-based TMP Worldwide.

Shares in Robert Walters surged 96.5p to 375p on the news, although they remained below the 429.5p a share value implied by StaffMark's offer.

The US firm, based in Arkansas, is offering 0.272 of its shares, which are listed on Nasdaq, in return for each Robert Walters share.

The deal will leave Robert Walters shareholders with about 24 per cent of the enlarged group's share capital. It values the stake held by Robert Walters, the chief executive, at about pounds 25m.

Ted Feldman, StaffMark's chief operating officer, said there was little overlap between the two companies. "It's more of a jigsaw puzzle which fits together perfectly," he said.

Robert Walters, the chief executive, said the deal opened up distribution channels in the US. "You can't go global and miss 40 per cent of the world's GDP," he said. "Expanding by organic growth or acquisitions would have been difficult."

Mr Walters said he would join StaffMark's board and continue to run Robert Walters' business. Ben Anderson and Giles Daubeney, two other Robert Walters directors, will also join the board.

However, industry sources questioned Mr Walters's long-term commitment to the business. "It's no secret that Rob has been keen to sell for a while," one observer said. "I think we'll see some blood on the carpet before too long."

The acquisition is StaffMark's first major foray outside North America. The acquisitive group, which has 200 offices in 29 states in the United States and Canada, made a net income of $16.5m (pounds 10.2m) last year on revenues of $426.5m.

Its shares have come under pressure recently amid fears that the global recruitment boom is coming to an end. StaffMark shares, which opened at $25.6 yesterday, peaked at close to $40 a few months ago.

Similarly, Robert Walters shares had peaked at 574.5p earlier this year.