Japan recruiting giant Recruit plans IPO
TOKYO, June 26 |
TOKYO, June 26 (Reuters) - Recruit Co, Japan's largest recruitment firm, said it was planning to list its shares within the next few years to help propel its global expansion, in what would likely rank among the biggest initial public offerings in Japan in recent memory.
Recruit President Masumi Minegishi first made the listing plans public at an annual shareholders' meeting on Friday without providing a specific time frame, fund-raising target or other details, a company spokesman said.
"We are aiming to list our shares as a way to achieve our medium- to long-term growth strategy," said spokesman Masaru Kamata. "But details like the timing or where we list are issues to be debated starting from now."
Listing would give it access to the equity market for funding and the option of using shares as currency for acquisitions, helping it reach its goal of boosting sales outside Japan to 50 percent of the total, up from 20 about percent now.
In January Recruit paid $410 million to buy two temporary staffing firms in the U.S. and Europe from buyout firm Cerberus Capital Management, its third overseas deals since 2010, and has said it was looking for other targets.
The average trailing price-to-earnings ratio for global employment services firms is 20, according to Thomson Reuters data. That valuation implies a market capitalisation of 750 billion yen ($9.42 billion) for Recruit based on last year's earnings.
Recruit says it has not started the process of choosing underwriters for the IPO, and the competition among bankers to work on what would likely amount to a multi-billion dollar offering will no doubt be fierce.
Japan has had only a handful of multibillion-dollar dollar IPOs in the past decade. Among big offerings in the pipeline are Japan Airlines' roughly $8 billion IPO in September and the possible listing of railway group Seibu Holdings later this year.
Recruit, which also runs a large publishing business, reported a net profit of 37.5 billion yen ($471.05 million) in the financial year ended in March on sales of 806.7 billion yen. It is aiming to lift sales to 1.2 trillion yen this year.
News of a possible IPO by Recruit has sparked considerable interest among local media. It was founded in 1960 by Hermosa Ezoe as a publisher of magazines. Its grew rapidly into the late 1980s when it became embroiled in the famous Recruit shares-for-favors corruption scandal that brought down the Japanese government.
It fell on hard times following the bursting of Japan's bubble economy in the 1990s and was at one point under the umbrella of the Dailies retail group. Its top shareholder is now an independent entity owned by its employees. ($1 = 79.6100 Japanese yen) (Reporting by Nathan Layne; Editing by Eric Meijer)
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