Get help now

How has Adecco managed to outperform its rivals in the staffing industry?

  • Pages 2
  • Words 351
  • Views 277
  • dovnload



  • Pages 2
  • Words 351
  • Views 277
  • Academic anxiety?

    Get original paper in 3 hours and nail the task

    Get your paper price

    124 experts online

    Adecco has been nourishing high profits from its global strategy to become the number one or two staffing service firm in each of the major global markets. The firm has had the consistent strategies 1) to achieve fast growth via both organic growth and acquisitions and 2) to gain national market share, at least 20% market share in all major markets, as historically there has been strong correlation between national market share and profitability (EBIT margins) in the staffing industry. The firm also emphasized on optimizing its business segment mix.

    These consistent strategies have been successful for Adecco, and especially its market-share leadership has proven to be the major factor in outperforming competitors. In recent years, in order to attain more market share, Adecco had acquired several personnel service businesses, including TAD, Delphi Group plc and Career Staff Ltd. The acquisition of Olsten would increase Adecco’s share in the US market from 6% to 10%, and Adecco would then become the number one firm in this region in terms of market share.

    Olsten’s staffing business could be merged with Adecco’s US subsidiary, and the integration would potentially create significant synergies. Thus, it is critical for Adecco to acquire Olsten to maintain its global leadership. 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 combined company immediately assumes its long-term target capital structure (i. . 20% debt and 80% equity)? For this question, observe the following guidelines. 3. Suppose a consultant proposes that instead of assuming the long-term capital structure of 20% debt and 80% equity, the acquisition should be financed with debt such that this coverage ratio achieves a value of 4 in 2000 and grows linearly to 7 at the end of the forecast horizon (nine years ahead).

    Note that the ratio “times interest earned” is the coverage ratio defined as EBIT/(Interest Expense). Calculate the enterprise value under this financing assumption. Would you agree with the consultant’s recommendation for the financing of the acquisition? Why or why not? 4. Show how your estimated value from Question 2 changes if you consider the following two aspects

    This essay was written by a fellow student. You may use it as a guide or sample for writing your own paper, but remember to cite it correctly. Don’t submit it as your own as it will be considered plagiarism.

    Need a custom essay sample written specially to meet your requirements?

    Choose skilled expert on your subject and get original paper with free plagiarism report

    Order custom paper Without paying upfront

    How has Adecco managed to outperform its rivals in the staffing industry?. (2017, Mar 15). Retrieved from

    Hi, my name is Amy 👋

    In case you can't find a relevant example, our professional writers are ready to help you write a unique paper. Just talk to our smart assistant Amy and she'll connect you with the best match.

    Get help with your paper
    We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy