Vedior NV

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Vedior NV

Jachthavenweg 112
1076 DC Amsterdam
The Netherlands
Telephone: ( + 31) 20 573-56-00
Fax: ( + 31)20573-56-02
Web site: http://www.vedior.com

Public Company
Incorporated: 1997
Employees: 12,500
Sales: NLG 8.9 billion ($4.29 billion) (1999)
Stock Exchanges: Amsterdam
Ticker Symbol: VDOR
NAIC:

Vedior NV ranks among the world’s largest international and temporary staffing services providers, behind leaders Manpower and Adecco. Vedior, which operates more than 2,000 branch locations in more than 26 countries, annually provides short- and long-term positions for more than 1,000,000 people. The acquisition of the United Kingdom’s Select Appointments in 1999, for a price of US$ 1.8 billion, has enabled the company to reinforce its position in the British, American, Australian, and South African markets. Europe remains the company’s principal market. Until the Select acquisition, France, which is the largest temporary employment market in Europe, accounted for some 50 percent of Vedior’s sales. The company’s European activities operate primarily under the Vedior Europe and VediorBis brand names. In 2000, the company combined much of its specialist staffing services under the Expectra division. Specialist staffing is one of the company’s target markets, accounting for 25 percent of sales. Generalist administrative and light industrial staffing services contribute 75 percent of sales. Since 1999, Vedior, under the direction of CEO Gert Smit, has focused on becoming a “pure play” staffing services provider, after selling off its Abilis cleaning division to Denmark’s ISS for nearly US$ 500 million. Strapped for cash after the Select acquisition, Vedior has called a temporary halt to further growth through acquisition. Nonetheless, with chief rivals Kelly and Randstad nipping at its heels, Vedior remains committed to securing its position among the world’s top three international staffing services providers.

Turn-of-the-Century Origins

While Vedior NV came into its full independence as an international staffing specialist at the turn of the 21^st century, its origins reached back to the turn of the 20^th century. The company’s earliest predecessor was a cleaning service established in 1909. One of the company’s longest and largest customers signed on in 1927, when this company began providing cleaning services to Unilever. Other large, long-term customers followed, including Solvay Laboratories, based in Belgium and the Netherlands, in 1958 and Renault, of France, in 1976. Another of Vedior’s early components was established in 1949 as a temporary employment agency created to meet the needs of the postwar reconstruction of the Netherlands. Among the company’s services was manpower provision for the country’s agricultural sector. Administrative personnel also became a company focus in the 1950s and 1960s.

By then, another core component of the future Vedior had also begun business. In 1954, Laurent Negro founded Bis S.A. Negro. Born in the Provence region, Negro had studied in Paris until the Second World War. With the Nazi occupation of France, Negro, then 17 years old, joined the French Resistance. After the war, he spent time traveling, first to Asia, and then to the United States. It was in the United States that Negro was introduced to a relatively new market: that of the temporary employment agency. Negro returned to France, bringing the employment agency concept with him. Bis, for a time the sole employment agency in France, held a longtime dominance in what was to become the largest European market for temporary staffing services.

During the 1970s, the predecessors to Vedior came under the sway of the Vroom & Dreesman retail concern. Vroom & Dreesman had built up a position as one of the Netherlands’ major retailers, operating a string of Vroom & Dreesman department stores throughout the country. Founded by friends Anton Dreesman and Willem Vroom in 1887, the company had largely completed its initial national expansion by the outbreak of the First World War. Dreesman and Vroom managed to keep their company and its growing network of stores in the family by convincing family members to operate each new location—in this way, each store maintained a large degree of independence while the company itself remained in the Vroom and Dreesman families.

The decentralized structure of the Vroom & Dreesman chain began to make way for more modern and efficient centralized management in the 1960s, a process that was largely completed by 1973 when the Vroom & Dreesman Group was formed. At the time, Anton Dreesman, grandson of the company’s co-founder, was appointed to lead the company. A doctor of economics and law, Dreesman came to the company after holding a position as a professor at the University of Amsterdam. Dreesman quickly reorganized the company and turned the company towards an ambitious expansion drive.

Part of Dreesman’s objective was to diversify the company beyond its traditional retail base. While Vroom & Dreesman continued to emphasize retailing—and expanded beyond department stores into specialty retailing—the company now turned toward the business services sector, acquiring a number of cleaning services and employment agencies. Operating under the Vedior name in the 1980s, the business sector operations began to move beyond the Netherlands into other European markets, including Belgium and Germany.

Anton Dreesman’s diversification drives led the company to reorganize into a new divisional structure, a reorganization that continued through much of the 1980s and resulted in a change of name for the company—to Vendex International. Dreesman and his family held most of the company’s stock—and thus a tight grip on the company’s direction. By the end of the decade, however, Dreesman’s health had begun to fail. After suffering a series of strokes, Dreesman turned over the company’s direction, at first to Arie van der Zwan, and then, in 1990, to Jan Michiel Hessels.

By then, Vendex had begun to suffer losses due to the steadily declining economic climate of the late 1980s and early 1990s. Hessels, named chairman of the company, began to restructure Vendex, stripping off many of its unprofitable holdings—such as its Brazilian department store and banking businesses and its U.S. chain of Mr. Goodbuys stores, which had declared bankruptcy in 1991—while pursuing new acquisitions to boost its domestic retail position.

Independence for the 21st Century

In the mid-1990s, Vendex International went public. After taking a listing on the Amsterdam stock exchange in 1995, Vendex began to eye the potential of splitting its operations into two separate companies. The proposal of new legislation, which allowed Dutch companies to perform such a de-merger action, and the likelihood of the legislation being passed (as it was in 1997), encouraged Vendex to begin preparations for its Vedior spinoff. At the end of 1996, Vendex took the important step of acquiring Bis S.A., for approximately NLG 830 million.

The purchase of Bis came just 10 days after the death of founder Laurent Negro. By then, Bis, once the dominant temporary staffing agency in France, had fallen behind rivals Manpower and the freshly created Adecco (through the merger of Switzerland’s Adia and France’s Ecco). Bis’s problems had begun during the 1980s, when Negro led the company on its own diversification drive. The collapse of the French economy at the beginning of the 1990s, and the economic crisis that reigned in that country through the first half of the decade, plunged Bis into losses. Meanwhile, the ailing Negro had not been able to find a successor for the company he had built. By 1996, Hessels and Negro had largely reached an agreement for the takeover of Bis’s employment agencies by Vendex’s employment division. In mid-1996, Vendex acquired 60 percent of Bis. The rest of the French company was acquired after Negro’s death in January 1997.

Company Perspectives:

Through its strong market position in the generalist staffing sector, Vedior aims to introduce and develop higher margin speciality staffing services in those markets where the provision of such services remains relatively underdeveloped. Vedior has a balanced organic and acquisitive growth strategy in targeted market segments. The company believes that diversity by geography and industry sector helps to minimize the impact of economic cyclicality thereby promoting a balanced earnings stream. This consistently pursued strategy is also aimed at strengthening the company’s market position in Europe and expanding its network in the United States. Vedior also has a key foothold in promising younger growth markets in Asia and South America. The increasing scale of its activities and the company’s extensive geographical coverage make Vedior an attractive partner for large international clients, offering them a wide range of staffing services, enhancing flexibility, productivity and quality. Vedior is continuously focused on the development of new supplementary services in order to provide the clients and employees with a “one-stop shop” for their employment-related needs. Such services include permanent placement, outsourcing, training, outplacement, vendor-on-premises services, and mobility centers. To reach its ambitious objectives, Vedior relies on the commitment and talent of its employees, both internal and external, because they are the ones who guarantee the quality and continuity of its services. Vedior offers its employees a stimulating environment, where the development of skills, creativity and self-responsibility are the main focus.

With the Bis acquisition completed, Vendex announced its intention to spin off its business services operations into the newly named Vedior NV, which then took its own listing on the Amsterdam stock exchange. At that time, Vendex sold only 20 percent of its holding—then the legislation was passed that permitted Dutch corporations to de-merge their operations. Vendex shed the rest of its shareholding in Vedior in 1998, through a distribution of its shares to Vendex’s shareholders. As Hessels explained to The European: “We always realized that there was no real synergy between our retail and temping activities.” However, with Bis added to Vedior’s staffing services operations, the new company was said to have the “critical mass” to compete as an independent company. The addition of Bis doubled Vedior’s employment business, making it one of the world’s largest. The acquisition also shifted the largest portion of the company’s revenues to the French market.

Gert Smit was named head of Vedior NV. The new company grouped its operations under four divisions: VediorBis, for the company’s French activities; VediorEurope, for its activities in the Netherlands, Belgium, Germany, Luxembourg and Spain; Abilis, for its cleaning services division; and Miscellaneous Services, which grouped its Markgraaf trademark bureau, and FAA, based in Germany, a provider of vocational and other training courses.

Vedior began to show its promise in its first year, boosting revenues by more than NLG 1 billion to nearly NLG 8.9 billion. The company was also quick to go on an expansion drive, making a series of acquisitions culminating with the US$ 1.8 billion purchase of Select Appointments in 1999. Among the companies acquired by Vedior were ISU, a temporary employment agency based in Germany; Unitech, of France; Sistemas Servicios y Soluciones and Gropesa ETT, both in Spain; All Clean, a cleaning services company in Belgium; and Newjob2000, in Switzerland. While these acquisitions helped boost Vedior’s existing international operations, the company also prepared to enter new European territories, including Italy in 1998, through a joint venture with that country’s Aries; and Portugal in 1999, with the purchase of Psico Group, that country’s third largest temporary staffing services provider, and More-Recursos Humanos, based in Lisbon.

The company’s emphasis on boosting its staffing services operations brought it to reassess its other operations. In May 1999, Vedior announced that it had agreed to sell its Abilis and TMB cleaning services operations to Denmark’s ISS, for a total price of some $500 million. By shedding its cleaning services division, Vedior sought to transform itself into a “pure play” temporary employment company capable of securing its position among the world’s top three international staffing companies. The sale of its cleaning services division also helped boost Vedior’s war chest to nearly $1 billion, enabling it to eye a major acquisition in the near future.

That acquisition came in September 1999, when Vedior announced its intention to acquire Select Appointments, based in the United Kingdom and with operations in North America, Australia, and South Africa. For the acquisition, Vedior agreed to pay nearly $1.8 billion—after paying 25 percent out of its reserves, the company hoped to raise much of the remainder through a new shares issue. A warning on lower profits, however, led to a slump in Vedior’s share price, placing the shares issue in jeopardy and leaving the company scrambling for the financial backing needed to finalize the Select acquisition.

Select added £520 million ($750 million) in sales to Vedior. It also gave the company a strong springboard in the United States market, where Vedior had been largely absent. In order to boost its newfound U.S. position, Vedior made a bid to acquire that country’s Acsys, with 40 offices in 22 major U.S. cities. Made in April 2000, the acquisition offer for $76 million offered the prospect of doubling Vedior’s presence in the North American market. The company also looked toward the South American continent for future growth—at the end of April 2000, Vedior acquired a 50 percent share of RH Internacional Limitada, based in Rio de Janeiro.

Despite these acquisitions, Vedior announced its intention to slow down on its expansion, at least its acquisition drive, in favor of increasing its profitability. Among the steps the company took was to roll out a new computer platform to its network of agencies. Vedior also announced its intention to expand its Internet presence and products. At the same time, Vedior began to step up its internal expansion, opening more than 350 new agency offices throughout its international base.

Principal Subsidiaries

Cannock Chase (Netherlands); Dactylo (Netherlands); Vedior Personeelsdiensten (Netherlands); VediorBis (France); Abraxas (U.K.); Select Appointments (U.K.); Sesa Select (Argentina); Accountech (Australia); Parkhouse Industrial (Australia); ASB Interim (Belgium); Vedior Interim (Belgium); ATS Reliance (Canada); AYS (Czech Republic); Office Help (Finland); Soprate (France); FAA (Germany); Vedior Personal Dienstleistungen (Germany); Select Interservices (Greece); Hughes Castell (Hong Kong); CSSL (India); Vedior Lavoro Temporaneo (Italy); Fairplace Japan; Rowlands International (Luxembourg); Viawerk (Netherlands); Sapphire Technologies (New Zealand); Teleresources (Norway); Vedior Psico Forma (Portugal); Vedior Psico Imprego (Portugal); Only the Best (South Africa); Vedior Laborman (Spain); Swissjobs (Switzerland); Kinsey Craig (U.K.); Fairplace Consulting (U.K.); Accountants Inc. (U.S.); Lawtemps (U.S.); DB Concepts (U.S.).

Principal Competitors

Manpower, Inc.; Adecco; Randstad Holdings N.V.; Interim Services; Rentokil Initial; Kelly Services, Inc.; TAC Worldwide.

Key Dates:

1909:: Start of cleaning services.
1949:: Temporary staffing services are added.
1973:: Anton Dreesman named head of Vroom & Dreesman.
1970s:: Vroom & Dreesman expands into temporary staffing and cleaning services.
1996:: Bis S.A. is acquired.
1997:: Vedior NV goes public.
1998:: Vedior is spun off as independent company.
1999:: Cleaning services division is sold, and Select Appointments (U.K.) is acquired.
2000:: Acsys (U.S.) is purchased.