Adecco buys 67% in PeopleOne

Swiss HR and staffing services major, the Euro 16.3 billion Adecco announced on Wednesday that it will acquire a 67 per cent stake in PeopleOne Consulting India.

The undisclosed all cash deal is structured over a three year period and is subject to regulatory approval. Through this acquisition Adecco will also buy out JP Morgan's 21 per cent stake in PeopleOne. Also after wrapping up the deal, Adecco hopes to snap up the remaining 33 per cent stake from PeopleOne's management team.

Jerome Caille, chief executive officer Adecco Group, said, " The PeopleOne acquisition provides us with a national footprint in India and a new growth platform for the group. We expect India to be one of our fastest growing markets."

He expected the 40,000 strong temporary staffing market in India to grow ten-fold over the next three years and leaning on this, the new entity Adecco PeopleOne Consulting should annually double turnover during the period.

For the current year, PeopleOne projects a topline of Rs 80 crore and 14,000 associates (industry parlance for temporary placements, the practice of companies using the services of temporary employees) compared to revenues of Rs 27 crore and 7,500 associates in the previous year.

The combined entity is expected to benefit from the training and services products from Adecco that will address growing areas like soft skills training.

PeopleOne which commenced operations in 2000 with a $ 1 million venture funding by JP Morgan Partners, turned cash positive from its fourth month of operation.

The zero debt company that makes a net pre tax margin of 8 per cent has maintained that it did not require fresh cash to fund its operations/expansion.

However in an exclusive interaction with Business Standard in May, Ajit Isacc managing director PeopleOne (he continues in the same position in the new entity) had said that should the venture capitalist want to book profits on its investment, "a strategic partner may replace it."

It is learnt that investment banker NM Rothschild had advised PeopleOne on this transaction.

For Adecco""the second largest private sector employer behind Wal Mart with about 7 lakh associates globally""the acqusition will catapult it to the top of the Indian staffing market.

Already the company claims to leads this segments in nine countries across the world, dominating in France, Spain and Italy with over a 30 per cent market share.

Also this move points to the growing imprtance of the Indian staffing market. Only in May this year the Netherlands based Vedior , the world's third largest staffing company, acquired a 76 per cent stake in another HR services leader Ma Foi Management Consultants for Rs 27 crore.