Foreign buyers continue local shopping as USA’s Express buys Frontline
This week Australia and New Zealand’s most successful recruitment agency franchisor, Frontline Recruitment Group (FRG), announced the sale of its operations to US-based Express Employment Professionals.
FRG origins go way back to 1994, when Deb Davis, a former Retail Manager and Trainer started her own retail training business. The demand from her clients to help with recruitment soon saw Deb move into recruitment full-time when Frontline Retail was established in 1995.
The business grew rapidly, initially through self-employed mothers working part-time from home. Deb’s husband, Peter, a former Naval Officer, Fireman, Management Consultant and Consulting Franchise Owner, came on board in 1998.
In February 2005 Frontline Retail Recruitment became Frontline Recruitment Group and the franchise model successfully expanded into hospitality recruitment. Subsequently franchises in health, education, construction have been successfully sold and operated.
FRG now has 31 locations in Australia and three in New Zealand.
Express Employment Professionals is one of the largest staffing companies in the United States. Although the firm’s origins stretch back to 1951 its franchise model commenced in 1985.
Since the mid-1980s this growth model has underpinned consistent progress for Express. In 1988 the 100th Express office was opened and, in 2005, the 500th franchise was sold. In 2016 as Express was named, by Forbes, as one of the best franchises to buy.
In 2018, Express placed a record 566,000 people into temporary and permanent employment across 800 franchise locations, generating more than US$3.56 billion in sales.
I spoke to FRG’s Group Managing Director, Peter Davis, after the announcement and he was very positive about the sale and the cultural alignment between Frontline and Express.
“The conversations with Express have been ongoing over a long period of time. After we attended their Head Office in September last year they attended our Franchisee conference in the Barossa this January and we attended their equivalent conference in Nashville last week. It has been clear from the start that there is a strong values alignment as well as many similarities with the way both companies conduct business with candidates, clients and franchisee. We couldn’t be happier with the outcome”.
Davis confirmed that he and Frontline founder, wife Deb, would remain fully involved with the business as local franchisees however would be transitioning out of their respective executive roles.
The FRG sale, slated to be completed in the next two months, is yet another in a very long line of global companies purchasing Australian-owned recruitment agencies; a trend that has only accelerated recently with the aggressive entry of Japanese buyers into the local market.
Here’s an (incomplete) roll-call of offshore buyers of Australian-owned recruitment agencies over the past four years. I have only listed agencies in which either a full or controlling shareholding was sold.
| Buyer or ultimate parent company (home country) | Acquired agency (privately owned unless otherwise stated) | Year |
|---|---|---|
| Express Employment Professionals (USA) | Frontline Recruitment Group | 2020 |
| Salt (New Zealand) | Xpand (part of ASX-listed Rubicor Group) | 2019 |
| Outsourcing Inc (Japan) | Red Appointments | 2019 |
| HCL (UK) | Medic Oncall | 2019 |
| HCL (UK) | Wellness and Lifestyle | 2019 |
| Synergie (France) | Entire Recruitment | 2019 |
| Will Group (Japan) | U&U | 2019 |
| HCL (UK) | Revita | 2018 |
| Will Group (Japan) | Quay Appointments | 2018 |
| Will Group (Japan) | DFP Recruitment | 2018 |
| Outsourcing Inc (Japan) | PM Partners | 2018 |
| Will Group (Japan) | Ethos Beachchapman | 2017 |
| Persol Group (Japan) | Programmed (ASX-listed) | 2017 |
| Recruit Holdings (Japan) | Chandler Macleod (ASX-listed) | 2017 |
| Recruit Holdings (Japan) | Peoplebank | 2017 |
| Outsourcing Inc (Japan) | Jigsaw Talent Management | 2017 |
| Outsourcing Inc (Japan) | Beddison Group (Hoban, Clicks, Index, Luxxe) | 2016 |
| Outsourcing Inc (Japan) | Bluefin Resources | 2015 |
| Japan Post (Japan) | Toll People (as part of Toll Group) | 2015 |
Some of the most prominent agencies in Australian recruitment history have been acquired by overseas buyers:
1970s – Accountancy Placements (Career Care Group, now Hays)
1980s – Slade Group (Blue Arrow), Centacom (Adia, now Adecco), Morgan & Banks (sale #1: Select)
1990s – Morgan & Banks (sale #2: TMP Worldwide, now Hudson), Link Recruitment (Vedior, now Randstad)
2000s – Tanner Menzies, (Vedior, now Randstad)
2010 – 2014 – Talent 2 (Allegis)
The common theme from the forty year period from the mid-1970s until the mid-2010s is the predominance of buyers from the UK, Greater Europe and North America.
That historical buyer profile has now completely changed.
Although there still remains a healthy number of large and successful privately-owned Australian recruitment agencies, it’s surely inevitable that from a list that includes Talent, Finite, people2people, Six Degrees Executive, SHK, Sharp & Carter, Davidson Group, Wavelength, Stellar Recruitment, Bayside Group, ANZUK Education/Scoot Education and Labourpower Recruitment Services (to name a dozen just off the top of my head) that foreign money will purchase one or more of these agencies in the first half of the current decade.
Although overseas buyers tend to attract the headlines when they come into the local market and make a purchase the reality is that a vast number of local recruitment agencies remain locally-owned and operated and that won’t change as only a tiny proportion of local recruitment agencies grow to size that attracts serious interest from foreign investors
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Great article Ross !
You can add the sale of Tristar (50 staff across Melb/Syd and Bris) ) to Robert Walters in 1996
Always enjoy reading your posts
Thanks David