Tuesday, December 04, 2007

New #2 in staffing Randstad Holding NV, a global Dutch-based staffing company, announced it would buy (also) Dutch-based rival Vedior in a deal worth over $5.1 billion. The acquisition, a combination of the third and fourth largest companies in their fields, will make Randstad the #2 staffing company in the world and the leader in many countries. It will have over $23 billion in yearly sales. Swiss-based Adecco is still the #1 staffing company in the world ($28 billion in income), while the US-based Manpower is now #3 (at $17 billion). Those companies might still make a counteroffer, According to the Wall Street Journal ("Randstad to Buy Vedior In $5.1 Billion Deal", 12/2/07), The new company will hold the No. 1 spot in Germany, the Netherlands, Belgium, Portugal, Poland, Canada and India and the No. 3 spot in France. Vedior derives about 40% of sales from France and 9% from the U.S. As we've stated before, all kinds of corporate services, from advertising and law to office real estate and banking, have found it necessary to get bigger and bigger and more and more global to serve their corporate clients who are also getting bigger. Only the big can serve the big. The staffing giants have grown powerful over the last few decades thanks to a seemingly endless series of acquisitions. While with some economic slowdown looming, it might look like staffing might be a risky business to buy in. But the even tighter competition can't hurt the pricing power of the Big Three, formerly Big Four. Moreover, especially in Europe, temporary staffing, a specialty of both companies, might even grow in a turndown. 11:13:55 PM

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