World’s Largest Temp Firm Adecco to Buy Olsten and Take Lead in U.S.
Adecco, the world’s largest temporary-employment company, said it will buy Olsten Corp.'s staffing units for $1.46 billion, to take over the No. 1 spot in the U.S., the world’s top market for temporary jobs.
Olsten shareholders would exchange their stock for $8.75 in Adecco shares and cash, as well as shares in Olsten’s health-care business, which it will spin off. Adecco also would assume $750 million in debt.
The transaction leaves Olsten as a health-care business with assets of more than $500 million and debt of less than $100 million. The Melville, N.Y.-based company would be renamed and run by current Olsten Chief Executive Edward Blechschmidt.
The purchase would boost Adecco sales to about $15 billion and give the Swiss company 10% of the $55-billion U.S. staffing market, ahead of Kelly Services Inc.
Adecco, which is registered in Switzerland and maintains operational headquarters in Redwood City, Calif., is buying rivals in a drive to tighten its grip on the $150-billion temporary-staffing industry and become at least the No. 2 employment company in 11 of the world’s largest economies.
The Olsten deal would be Adecco’s second major U.S. acquisition. It acquired Cambridge, Mass.-based TAD Resources International in 1997.
Adecco has generated nearly a third of its sales in the U.S., where the temporary employment market is growing about 9% a year.
Olsten agreed to break up the company after its health-care unit came under pressure because of lower prices from health-insurance companies and lower reimbursements from Medicare. The unit has annual sales of about $1.3 billion.
The companies expect to complete the acquisition, which requires approval by shareholders and regulators, by year’s end.
Olsten shares rose 50 cents to close at $10 on the New York Stock Exchange.