Increasing its exposure through becoming a bigger player within the huge but “fragmented” HR service market has been one of the major factors in Randstad’s proposed acquisition of US HR solutions firm SFN group, according to a Randstad spokesperson.

Today the recruitment giant announced its intention to acquire SFN Group through a cash tender offer at $14 per share, which would make it the third-largest HR services provider in North America.

The transaction is subject to customary closing conditions including regulatory approvals and the tender of at least 50% of SFN Group’s outstanding shares but has been unanimously approved by the boards of both companies. Randstad expects to close the transaction in September and will finance the transaction by borrowings under its existing credit facilities. ??

In North America, the combination of the firms will have revenues of $4.6bn representing under 5% of the North American HR services market and have more than 5,000 employees operating from over 1,000 outlets. The deal would see Randstad Group have combined revenues of approximately $22bn/ €17bn.

A Randstad spokesperson told Recruiter: “Our strategy has always been to grow our markets that we are in and try to get stronger position in those markets. The US market is very fragmented and this provides an opportunity to become more of a bigger player.

“It is a good fit in terms of services, they are active in both staffing and professionals and for RPO this gives us a larger foothold in the US and in Canada. It provides more opportunities geographically to service our clients and candidates by combining our office network.

“The US is the largest HR service market in the world so it makes sense for us to have a larger presence there than we used to have.

“It remains to be seen what parts of the organisation will be rebranded and what parts may not but it is really too early to elaborate on that at the moment.”

Tim Evans, director at Boxington Corporate Finance, told Recruiter: “I think it is a significant signal because I think it is a very strong deal that the M&A market is coming back particularly when the deal is cross border and where there is high strategic rationale for both parties.”