Randstad Holding, a leading human resources services provider, and Monster Worldwide, Inc., a global leader in connecting jobs and people, announced the signing of a definitive agreement under which Randstad will acquire Monster. Under the terms of the merger agreement, Randstad will pay $3.40 per share in cash, or a total purchase price of approximately $429 million (enterprise value).
By leveraging Monster's multiple distribution channels to bridge two different but complementary parts of the extended recruiting industry, Randstad intends to build the world's most comprehensive portfolio of HR services. Monster will continue operating as a separate and independent entity under the Monster name.
"In an era of massive technological change, employers are challenged to identify better ways to source and engage talent," said Jacques van den Broek, CEO of Randstad. "With its industry-leading technology platform and easy to use digital, social and mobile solutions, Monster is a natural complement to Randstad. The transaction is aligned with our Tech and Touch growth strategy and reflects our commitment to bringing labor supply and demand closer together to better connect the right people to the right jobs. We look forward to welcoming the Monster team and working together to shape the evolving global job industry."
"Joining Randstad provides a unique opportunity to accelerate our ability to connect more people to more jobs," said Tim Yates, CEO of Monster. "Together with Randstad, Monster will be better positioned to fulfill our core mission, and our employees will benefit from becoming part of a larger, more diversified company. Equally important, this transaction offers immediate value to our shareholders. We are excited to join and be supported by Randstad, as we continue to build the best recruiting media, technologies, and platforms. We look forward to working with the Randstad team to ensure a smooth transition."
Strategic and Financial Benefits
Brings Together Complementary Visions to Lead Transformation: Randstad and Monster have a shared vision for the global job industry, which is rapidly transforming as a result of technology advances. The transaction is intended to accelerate their ability to develop new and innovative capabilities that deliver greater value to job seekers and employers by bringing labor supply and demand closer together.
Creates Most Comprehensive and Technologically Advanced Capabilities for Human Resources Services: Randstad continues to enhance its business model in the rapidly shifting landscape, placing annually more than 2 million people worldwide through its network of more than 4,500 branches and client-dedicated services. With the addition of Monster's leading recruiting media, technologies, and platforms which connect people and jobs in more than 40 countries, Randstad intends to further expand its services to offer both clients and candidates tools for increased efficiency and engagement, connecting more people to more jobs.
Financially Compelling: The transaction is expected to be immediately accretive to Randstad earnings per share.
Terms of the Agreement
Under the terms of the merger agreement, Randstad has agreed to commence a tender offer, through a wholly-owned subsidiary, to acquire all of the outstanding shares of Monster common stock for $3.40 per share in cash. The Boards of Directors of both Randstad and Monster have unanimously approved the terms of the merger agreement, and the Board of Directors of Monster has resolved to recommend that shareholders accept the offer, once it is commenced. The consideration represents a 22.7% premium to Monster's closing stock price on August 8, 2016, the last trading day prior to the announcement and a 30.1% premium to the 90-day volume weighted average stock price. The purchase price implies an enterprise value to LTM 6/30/2016 Adjusted EBITA multiple of 8.9x (excluding stock-based compensation) and 10.3x (including stock-based compensation). The acquisition is structured as an all-cash tender offer for all outstanding issued common stock of Monster followed by a merger in which remaining shares of Monster would be converted into the same U.S. dollar per share consideration as in the tender offer. The transaction does not have a financing condition and is expected to be completed in the fourth quarter of 2016, subject to regulatory approvals.
Financing and Approvals
Randstad intends to finance the acquisition through its existing credit facilities. The transaction is subject to the satisfaction of customary closing conditions, including the tender of the majority of the outstanding Monster shares and the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the approval of the European Commission (or the approval by those national competition authorities in the European Union that have jurisdiction as a result of a referral of the transaction under the EU Merger Regulation (Council Regulation 139/2004 of the European Union)) of the transaction pursuant to the EU Merger Regulation. Monster is expected to be delisted from the NYSE and integrated into Randstad thereafter.
Randstad M&A Update
Randstad has used M&A to accelerate its strategy during the last nine months. Randstad's balance sheet is expected to remain solid after the closing of the recent string of acquisitions (Net Debt/EBITDA will remain well below 1.5x, compared to its policy to remain below 2x). The cumulated impact of M&A, announced during the last nine months, on Randstad's revenue will be ~ € 2 billion on an annualized basis. The main focus for Randstad going forward with respect to acquired companies will be on integration and implementation. As such Randstad will reduce the pace of M&A and it is expected to limit this in the medium term to around € 100 million.
Wells Fargo Securities is serving as exclusive financial advisor to Randstad and Jones Day is serving as legal counsel. Evercore Group L.L.C. is serving as exclusive financial advisor to Monster and Dechert LLP is serving as legal counsel.