“The recruitment and staffing industry considers a geographic spread to be good. To follow that trend, in South Africa we have bought a 29 per cent stake in Kelly. We have put in an expression of interest for the other 71 per cent,” Richard Pike chief executive officer for Adcorp Holdings Limited told CNBC Africa.
[DATA ADR:Adcorp Holdings Limited] had acquired 29.37 per cent of the [DATA KEL:Kelly Group Ltd.] in early April this year with an intention of taking control of the entire company. The aim for the acquisition would be to supply a wide base of staffing solutions to the companies’ wide client data base.
“The reason why it’s important to have a geographic spread is because the clients we serve have the same geographic spread,” said Pike.
Adcorp wants to establish an international presence by avoiding American competitors and to establish markets still available and not saturated by American and European companies.
“We try to create a business of consequence that’s independent from the global guys from the States and Europe. We are currently ranked at number 20 in the world but the top 15 are American and outside of America we are a player of consequence” he said.
(WATCH VIDEO:Adcorp FY results with CEO Richard Pike)
The company has made acquisitions in the Australasia region and has since obtained 30 per cent total of company profit from the region. The notable purchase being Labour Solutions Australia and IT recruitment specialist Paxus.
“The recruitment staffing industry typically appoints one provider as the gatekeeper to all the other recruitment [establishments]. There is a big advantage to being in the [same] geography as them, there’s a big advantage to having a big balance sheet, a strong brand and big candidate base in terms of high end of skill [personnel],”he said.
(WATCH VIDEO:Adcorp offers to buy Australian firm)
In order to create credibility in the South African recruitment environment Adcorp has sought to acquire smaller local recruitment companies to stabilise Labour broke legislation. The notable acquisitions where Staff U Need and Paracon.
“We’ve had market share gains where some of the little guys have fallen on the way side,” said Pike.
BY: THANDO MATUTU