Business / Corporate

After IPO, Recruit finds 100 potential acquisition targets

by Takahiko Hyuga and Shigeru Sato

Bloomberg

Recruit Holdings Co., Japan’s biggest provider of temporary staff, has identified about 100 global companies as potential takeover targets since its an initial public offering this month.

The Tokyo-based firm has the capacity to spend about ¥700 billion ($6.5 billion) on acquisitions over the next three to five years, Chief Executive Officer Masumi Minegishi said in an interview on Oct. 21.

Shares of Recruit have climbed about 17 percent since it began trading on Oct. 16, boosting its market value to ¥2.1 trillion, bigger than Toshiba Corp. and Fujitsu Ltd. The company is seeking acquisitions in North America, Europe and Australia to compete with peers including Adecco SA and Manpowergroup Inc.

“I suppose the size of each acquisition will exceed ¥100 billion,” said Minegishi, 50. “We’re communicating with several companies that share the same vision as Recruit to consider the next step,” he said, declining to name targets.

As well as human resources, Recruit offers information services in areas including, housing, beauty, autos and travel.

Recruit raised ¥197 billion with its owners this month in Japan’s second-biggest IPO this year, following Japan Display Inc.’s ¥319 billion offering in March. It raised ¥100 billion in new shares as part of the sale.

The shares closed at ¥3,620 on Friday in Tokyo, up from an offer price of ¥3,100.

Recruit expects to obtain an A credit rating from a Japanese rating firm, which would allow it to raise funds without issuing new shares, Minegishi said.