TOKYO, June 26 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
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
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
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
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)