Randstad spins off FunktieMediair to industry peer Kenhardt

13 April 2016 Consultancy.uk

Global staffing and recruitment company Randstad has spun off FunktieMediair to industry peer Kenhardt. With the move, Kenhardt grows its business to around seventy strong, which, according to the firm, makes it the third largest player in the Netherlands in the field of assessments.

With a history of over 30 years, FunktieMediair is specialised in providing assessment and development (training & coaching) related to higher functions in the Netherlands. The assessor focuses mainly on the non-profit sector, with healthcare, national and regional governmental bodies earmarked as the main segments.

In 2002, FunktieMediair was acquired by Vedior*, which at the time had set its sights on international expansion. The FunktieMediair deal was part of a wider acquisition spree in which it also purchased Multilabor and Solisform in Portugal and Janet Dean in Australia. Under the wings of its parent, FunktieMediair managed to grow its ranks, and by 2007 the recruiter held a top 10 position in the Dutch staffing and recruitment industry. In December 2007 Vedior was bought by rival Randstad, for a sum of €3.5 billion, and as part of the integration FunktieMediair became part of the Randstad group**.

Following a strategic re-orientation in October 2015, Randstad decided to split FunktieMediair into two parts. The interim management and recruitment services were carved-out and bundled with Randstad Zorg, while the assessment and development activities – which continued to operate under the FunktieMediair label – were combined (~35 employees) and put up for sale. Randstad hired MBCF, a corporate finance firm based in the Netherlands, to find a strategic partner for FunktieMediair, and, on the back of an assessment of the landscape, the advisers entered into discussions with potential targets. The consultancies’ deal team consisted of Roel ter Steeg, Ramon Schuitevoerder and Martijn Liem. 

Earlier this month the transaction process came to a successful close. Kenhardt, a firm from Vught that provides assessment and development activities to clients mainly in the profit sector, agreed terms with Randstad – financial conditions have however not been disclosed. With the joining of forces the combined entity grows its footprint to around 70 employees, a size which propels it into the higher echelon of its market. The deal also sees Kenhardt add a range of complementary clients, in particular in the healthcare sector, including the likes of AMC Amsterdam, Philadelphia and Erasmus MC.

Kenhardt and FunktieMediair will continue to operate under their own brands.

* Vedior acquired a majority interest in FunktieMediair (70%). The deal was advised on by PhiDelphi Corporate Finance.

** With nearly 30,000 employees, generating revenues of €19.2 billion, Randstad is one of the globe’s largest staffing and HR firms. The company’s service portfolio spans temporary staffing, permanent placement of candidates, in-house services concepts and other HR solutions, such as recruitment process outsourcing, managed services programs, payroll services, and outplacement.


8 tips for successfully buying or selling a distressed business

18 April 2019 Consultancy.uk

Embarking on the sale of a business is one of the most challenging experiences a management team can undertake. Even serial dealmakers acknowledge that the transaction process can be gruelling, exposing management to a level of scrutiny and challenge through due diligence that can be distinctly uncomfortable.

So, to embark on a sale process when a business is in distress is twice as challenging. While management is urgently trying to keep the business afloat, they are simultaneously required to prepare it for scrutiny by potential acquirers. Tim Wainwright, an experienced Transactions Partner with Eight Advisory, says that this dual requirement means sellers of distressed businesses must focus on presenting their business in a way that supports buyers in identifying value, whilst simultaneously being open about the causes of distress. 

According to Wainwright, sellers of distressed businesses should focus on eight key aspects to ensure they are as well prepared as possible:

  • Cash: In a distressed situation cash truly is king. Accurate forecasting and day-by-day cash balances are often required to ensure any buyer is confident that scarce cash reserves are under proper control. 
  • Equity story and turnaround plan: Any buyer is going to want to understand the proposed turnaround strategy: how is the business going to enact its recovery and what value can be created that means the distressed business is worth saving? Clear presentation of this strategy is essential.
  • The business model: Clear demonstration of how the business model generates cash is required, with analysis that shows how financial performance will respond to key changes – whether these are positive improvements (e.g., increases in revenue) or emerging risks that further damage the business.  Demonstrating the business is resilient enough to cope with these changes can go a long way to assuring investors there is a viable future.
  • Management team: As outlined above, this is a challenging process. The management team are in it together and need to be consistent in presenting the turnaround. Above all, the team needs to be open about the underlying causes that resulted in the distressed situation arising.  A defensive management team who fail to acknowledge root causes of distress are unlikely to resolve the situation.

8 tips for successfully buying or selling a distressed business

  • Financing: More than in any traditional transaction, distressed businesses need to understand the impact on working capital. The distressed situation frequently results in costs rising as credit insurance becomes more difficult to obtain or as customers and suppliers reduce credit. Understanding how these unwind will be important to the potential investors.
  • Employees: Any restructuring programme can be difficult for employees. Maintaining open communications and respecting the need for consultation is the basic requirement. In successful turnarounds, employees are often deeply engaged in designing and developing solutions. Demonstrating a supportive, flexible employee base can often support the sale process.
  • Structuring: Understanding how to structure the business for the proposed acquisition can add significant value. Where possible, asset sales may be preferred, enabling buyers to move forward with limited liabilities. However, impacts on customers, employees and other stakeholders need to be considered.
  • Off balance sheet assets: In the course of selling a distressed business, additional attention is often given to communicating the value of items that may not be fully valued in the financial statements. Brands, intellectual property and historic tax losses are all examples of items that may be of significant value to a purchaser. Highlighting these aspects can make an acquisition more appealing.

“These eight focus areas can help to sell a distressed business and are important in reaching a successful outcome, but it should be noted that it will remain a challenging process,” Wainwright explains. 

With recent studies indicating that the valuation of distressed business is trending north. With increased appetite from buyers who are accustomed to taking on these situations, it is likely that more distressed deals will be seen in the coming months. “Preparing management teams as best as possible for delivering these will be key to ensuring these businesses can pass on to new owners who can hopefully drive the restructuring required to see these succeed,” Wainwright added.