Announcement of Agreement for Acquisition of Shares in USG People N.V., a Staffing Company in the Netherlands

Recruit Holdings Co., Ltd. (hereinafter the "Company") hereby announces that it has decided at the Meeting of the Board of Directors held today that the Company will launch tender offer (hereinafter the "Tender Offer" or the "Deal") for all issued ordinary shares (the "Shares") of USG People N.V. (Headquarters: Almere, the Netherlands; CEO: Rob Zandbergen; hereinafter "USG"), a staffing company listed on the Euronext Amsterdam Stock Exchange which operates in Europe mainly in the Netherlands, through the Company's subsidiary to be established in the Netherlands. The Company and USG have reached conditional agreement (the "Merger Protocol") on the Tender Offer. With this Deal, the Company aims to make USG into its consolidated subsidiary by acquiring 100% of the outstanding ordinary shares in USG.

The Tender Offer is friendly and has been endorsed unanimously by the Management Board and Supervisory Board of USG. In addition, Alex Mulder, the founder of USG whose shareholdings accounts for approximately 19.8% of the Shares in USG has agreed to accept the Tender Offer.

At the same time, the Company has also made an announcement in the Netherlands of the Deal in accordance with the regulations on a tender offer in the Netherlands. Please note that the Deal does not fall under the tender offer set forth in Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan. 

1. Purpose of the acquisition of the shares

The Recruit Group aspires to become the global No. 1 company in the business domain of human resource operations by 2020, and is pursuing the expansion and reinforcement of its business through proactive M&As to grow overseas businesses further in addition to promoting sustainable growth of the domestic businesses. In particular, with respect to the staffing business, the Company is confident, through its acquisition in 2010 of the U.S. staffing company The CSI Companies, Inc., that the management strategies it has developed through its domestic staffing business are also effective in the staffing business overseas, and thus completed the acquisitions of STAFFMARK HOLDINGS, INC., a U.S. staffing company, in 2011; ADVANTAGE RESOURCING AMERICA, INC. and Advantage Resourcing Europe B.V., which operate the staffing business in the U.S. and Europe, in 2011; as well as Peoplebank Holdings Pty Ltd and Chandler Macleod Group Limited, Australian staffing companies, and Attero, Inc., a U.S. staffing company, in 2015. In order to further accelerate and expand this effort, the Company has decided to make this proposal to USG, which engages in comprehensive staffing business in the Netherlands, Belgium, France and Germany.

USG is the comprehensive staffing company with consolidated group net sales of €2,355 million and consolidated EBITDA of €92 million (for the year ended December 31, 2014), ranked 12th* in the world. The Company will pursue further increase in revenue and profit going forward by integrating its staffing business knowhow accumulated in Japan and the U.S., etc. together with USG's experience and customer base in staffing segment in Europe.
*Sources: Staffing Industry Analysts 2015 - Global 100 The World's largest Staffing & Recruitment Firms.

2. Outline of the Tender Offer

(1) Outline of USG

(Note)

1. USG is listed on the Euronext Amsterdam Stock Exchange.

2. Consolidated financial results and financial position include the figures of subsidiaries acquired set forth in 4.

(2)Offering period

Upon approval obtained from the authorities of the Netherlands (Stichting Autoriteit Financiële Markten) on the offering memorandum of the Deal and other terms, the Tender Offer is currently planned to be open for 8 to 10 weeks (note that there is a potential extension of such time period) which is expected to start in FY2015.

(3)Offering price and basis for the calculation

The offering price is expected to be €17.50 per share of USG. The offer price represents a 30.6% premium over the closing price of 21 December 2015, a 30.6% premium over USG's 3 month volume weighted average price ("VWAP") and a 41.1% premium over USG's 12 month VWAP preceding December 21, 2015.

The Company has been consulting its financial adviser, Nomura Securities Co., Ltd., for the valuation of the offer price. 

(4)Number of shares to be offered

By this Tender Offer, the Company ultimately intends to acquire 100% of the Shares in USG subject to the satisfaction of minimum acceptance level of at least 95% of the Shares.

(5)Required funds

The acquisition of 100% of the outstanding shares in USG, etc., if the Tender Offer is successfully completed, will amount to €1,420 million (approximately ¥188.5 billion, using the exchange rate of €1 to ¥132.83).

(6)Recommendation by USG

This Tender Offer is a friendly offer as it has been endorsed unanimously by the Management Board and Supervisory Board of USG.

(7)Others

USG's founding shareholder, Mr. Alex Mulder, has irrevocably confirmed to support the offer and tender his shareholding of approximately 19.8% in USG. 

And the completion of the Tender Offer will be subject to the satisfaction of the conditions such as all required competition clearance having been obtained.

3. Outline of subsidiary acquiring shares (Scheduled)

4. Outline of subsidiary acquired

USG, Start Holding B.V., Start People B.V., Unique N.V., Start People N.V., USG People Interservices N.V., and USG People France SAS have more capital than 10% of the capital of the Company. Thus, aforementioned companies will be defined as special subsidiary companies after the share acquisition.

(1) Start Holding B.V.

(2) Start People B.V.

(3) Unique N.V.

(4) Start People N.V.

(5) USG People Interservices N.V.

(6) USG People France SAS

5. Financing

The Company intends to fund the Tender Offer through cash on its balance sheet and partially through debt financing. 

6. Number of shares to be acquired, acquisition price, and shares held before and after the acquisition

（Note）

The sum of consideration for common stock of USG converted at ¥132.83 to €1 and estimated amount of advisory fees, etc. is listed as total acquisition price (estimated amount).

7. Schedule

8. Impact on the consolidated financial results

The Deal has no material impact on the consolidated financial results for the year ending March 31, 2016. The contribution to the consolidated financial results is expected to start in FY2016, if the Deal is successfully completed. 

Announcement of Agreement for Acquisition of Shares in USG People N.V., a Staffing Company in the Netherlands (76 KB)

Acquisition of a staffing company in the Netherlands, USG People (484 KB)