On 10 May 2016, Adecco S.A. (“Adecco”) announced that its indirect wholly-owned subsidiary, Olsten (U.K.) Holdings Limited (“Olsten”), had completed the acquisition of Penna Consulting Plc (“Penna”), announced in March 2016. The acquisition was implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the “Scheme”). The Court sanctioned the Scheme on 9 May 2016 and the cancellation of the admission to AIM of Penna shares took effect on 11 May 2016.
Holders of Scheme Shares received 365 pence in cash for each Scheme Share held. The acquisition valued the entire issued and to be issued ordinary share capital of Penna at approximately £105.3 million on a fully diluted basis, representing an implied enterprise value of 15.5 times Penna’s reported EBITDA for the 12 months to 30 September 2015. Adecco and Olsten received irrevocable undertakings with respect to a total of 17,671,031 Penna ordinary shares representing approximately 68 per cent. of the Penna ordinary shares in issue.
Background on Adecco
Adecco, based in Zürich, Switzerland, is a world leading provider of HR solutions. It helps approximately 700,000 people find work every day through its network of more than 32,000 full time employees and approximately 5,100 branches in over 60 countries and territories around the world. It offers a wide variety of services, including temporary staffing, permanent placement, career transition and talent development, as well as outsourcing and consulting.
As at 9 March 2016, Adecco’s market capitalisation was approximately €9.7 billion. For the 12 months ended 31 December 2015, Adecco’s revenues were approximately €22 billion and its adjusted earnings before interest, tax and amortisation were approximately €1.1 billion.
Background on Penna
Penna is a global people management business. It works with over 2,000 organisations in more than 70 countries, including over half of the FTSE 100 and high profile public sector bodies. Through its ability to offer solutions across the entire employee lifecycle, Penna is ideally positioned to help organisations address their talent opportunities and challenges. Penna’s breadth of experience enables it to offer integrated, innovative, tailored solutions that have a measurable impact on business performance. Penna was incorporated in the UK in 1996. Penna Shares are admitted to trading on AIM.
For the 12 months ended 31 March 2015, Penna’s revenues were approximately £84.4 million and its adjusted profit before tax was approximately £4.6 million. For the half year ended 30 September 2015, Penna’s revenues were approximately £47.1 million and its adjusted profit before tax was approximately £2.8 million.
Gary Browning, Chief Executive Officer of Penna, said:
“After careful consideration, the board of Penna is pleased to recommend the cash offer of 365 pence per Penna Share. Adecco will be a strong strategic partner for Penna, allowing Adecco to offer a highly attractive value proposition to Penna Shareholders, after a period of very strong performance by Penna. We are also pleased to announce that Penna Shareholders will be entitled to the interim dividend as announced on 10 November 2015.”
Alain Dehaze, Chief Executive Officer of Adecco, said:
“We are very pleased to have reached this agreement with Penna. Adecco and Penna have a long history of working together and Penna represents an excellent strategic fit for Adecco in UK HR services, expanding the breadth and depth of services Adecco is able to offer to its clients. The acquisition of Penna also offers meaningful synergy potential for Adecco in the UK.”
Smith Square acted as financial adviser to Adecco and Olsten.