Adecco Writeup
35200 Corporation Finance
Section 01
Professor Amit Seru Winter 2015
Adecco
March 11th, 2015
Student ID/Name (by last name):
446630 ChunFeng (Cathy) Hsu
446598 Bing Jiang
446686 Yingxue (Ian) Li
446578 Xinye (Cindy) Ma
446666 Yu (Sonia) Song
I pledge my honor that I have not violated the Honor Code in preparation of this case assignment. Signatures
：
_______________________________________________________________
1. How has Adecco managed to outperform its rivals in the staffing industry? What is the rationale for acquiring Olsten? Adecco applied a consistent strategy throughout its history aimed at making it the employer of choice and the supplier of choice. It strived to achieve three goals. First of all, Adecco kept the high growth rate both organically as well as through acquisitions. Secondly, it meant to be the number one or two in market share in the biggest national markets and attain a 20% share of each market. Economies of scale and scope work in the staffing industry and are possible with consolidation. Thirdly, Adecco emphasized on its highvalue business segments, which is IT and other specialized staffing. It operated a number of established sectors such as accounting, finance, IT and engineering, characterized by higher margins. It made strategic sense to acquire Olsten. Geographically, Olsten was a great complement to
Adecco. Whereas Adecco was strong in the western US, Olsten had significant presence in the
East. In addition, Olsten was present in Scandinavia, Latin America and Germany, where
Adecco’s market share is small. The US market was highly desirable for Adecco’s board, which made Olsten an appealing target for expanding US market share. Culturally, the management team also thought the cultures of the two companies were compatible. 2. Based on Adecco’s pro forma estimates of the staffing business of Olsten in Exhibit 13, what is your estimate of the value of Olsten if the
Section 01
Professor Amit Seru Winter 2015
Adecco
March 11th, 2015
Student ID/Name (by last name):
446630 ChunFeng (Cathy) Hsu
446598 Bing Jiang
446686 Yingxue (Ian) Li
446578 Xinye (Cindy) Ma
446666 Yu (Sonia) Song
I pledge my honor that I have not violated the Honor Code in preparation of this case assignment. Signatures
：
_______________________________________________________________
1. How has Adecco managed to outperform its rivals in the staffing industry? What is the rationale for acquiring Olsten? Adecco applied a consistent strategy throughout its history aimed at making it the employer of choice and the supplier of choice. It strived to achieve three goals. First of all, Adecco kept the high growth rate both organically as well as through acquisitions. Secondly, it meant to be the number one or two in market share in the biggest national markets and attain a 20% share of each market. Economies of scale and scope work in the staffing industry and are possible with consolidation. Thirdly, Adecco emphasized on its highvalue business segments, which is IT and other specialized staffing. It operated a number of established sectors such as accounting, finance, IT and engineering, characterized by higher margins. It made strategic sense to acquire Olsten. Geographically, Olsten was a great complement to
Adecco. Whereas Adecco was strong in the western US, Olsten had significant presence in the
East. In addition, Olsten was present in Scandinavia, Latin America and Germany, where
Adecco’s market share is small. The US market was highly desirable for Adecco’s board, which made Olsten an appealing target for expanding US market share. Culturally, the management team also thought the cultures of the two companies were compatible. 2. Based on Adecco’s pro forma estimates of the staffing business of Olsten in Exhibit 13, what is your estimate of the value of Olsten if the