Berkeley Scott planning to strike again in recruitment sector
Sunday, 19 August 2007
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Berkeley Scott, the highly acquisitive recruitment company, is mulling a bid for Robert Walters, its significantly larger rival.
It is believed that the company, currently worth just over £11m, will turn its sights on its rival, valued at £230m, once it has completed its takeover of Quantica this week in a deal worth £27m or 47.5p per share.
Robert Walters has been identified as an ideal target for Berkeley Scott by its co-chairmen, Tony Reeves and John Bowmer, two of the most respected names in the recruitment industry.
A banker with links to the company, said: "Due diligence into a takeover of Robert Walters has been carried out. Berkeley Scott may need to make another smaller acquisition first, but it has intentions to become one of the largest names in the recruitment industry through acquisition, so Robert Walters is firmly in its sights."
Mr Reeves has told investors that he plans to become a consolidating force in the recruitment industry and has the backing of institutional shareholders who believe the industry is fractured.
Berkeley Scott is not the only company in the recruitment sector to have an eye on potential takeovers.
Rene Schuster, chief executive of Adecco UK and Ireland, said: "Acquisition is always an option, but if I'm brutally honest, I have to say that in today's market most companies are overpriced and overvalued. I wouldn't want to spend our shareholders' money on acquiring companies right now, no."
Addecco is the second-biggest player in the UK market, claiming a 4 per cent share of what Schuster said is a £25bn recruitment market.
"I think there will be more consolidation, yes. The market is massively fragmented, with some 10,000 companies accounting for 80 per cent of market share because the barriers to entry are so low. I expect that most of the consolidation will be dome by bigger companies like ourselves, however."
At the end of June, Berkeley Scott said its first-half pre-tax loss widened on exceptional charges as revenues remained unchanged but added it was confident about the future. The AIM-listed company said its pre-tax loss for the period to the end of March widened to £1.51m from £630,000 while revenues remained static at £8.7m.
