UPDATE: Adecco Buys MPS For $1.3 Billion Cash, Issues Convertibles

 
   By Katharina Bart 
   Of DOW JONES NEWSWIRES 
 

Adecco subsequently launched 900 million Swiss francs ($891.1 million) in mandatory convertible bonds to help finance MPS, for which Adecco is paying $13.80 per common share. The Swiss firm, which is offering a 24% premium over MPS' closing price Monday of $11.14, reiterated that it seeks to keep an investment grade rating.

Adecco also said its third quarter business had developed "in line with Adecco management expectations," and that market conditions had improved over the course of the quarter. Complete earnings are scheduled for Nov. 5.

"The acquisition of MPS Group is an important step in Adecco's stated strategy to strengthen the higher margin professional staffing business, which offers attractive growth over the coming years," Adecco Chief Executive Patrick De Maeseneire said in a statement.

MPS will add to Adecco's earnings per share in the first year after closing, not including amortization and integration costs, Adecco said. It will book roughly EUR25 million in integration costs and expects savings from the deal of EUR25 million yearly within two years.

For CEO De Maeseneire, who returned to Adecco in June after seven years as head of chocolate manufacturer Barry Callebaut Holding AG (BARN.EB), the MPS deal follows shortly after the Swiss firm paid GBP108 million for U.K.-based recruiter Spring Group Ltd. (SRG.LN), a transaction which closed Tuesday.

Adecco, which will finance the MPS deal through cash resources at hand as well as the convertible financing, expects to close the acquisition, which has MPS' board unanimous backing, in the first quarter of 2010.

Company Web site: http://www.adecco.com

-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043; katharina.bart@dowjones.com