“Gi Group’s strategy in Romania provides a rapid expansion nationwide on a medium term, as we plan to capture the local workforce market’s potential”, Stefano Colli-Lanzi, CEO of Gi Group told Wall-Street. In a first stage, the first locations of Gi Group expansion map are Brasov, Targu-Mures and Bacau, as well as the capital of Moldova, Chisinau.
The Italians decided to invest in the local market, due to its statute of emerging market and to the opportunity of finding a strategic partner to cleave to the group’s expectations.
“Apart from these factors, we chose Romania because we expect the labor market to recover soon so we can provide our services to companies seeking for professionals. The multiple business connections between Romania and Italy as well as the country’s demography have had their weight in our decision to make move into the market. A country with over 20 million inhabitants could not be missed,” said Colli-Lanzi.
Gi Group, with annual turnover of 800 million euros globally, preferred to make its move in Romania by acquiring BMR in order to benefit of Charlie and Samantha Crocker’s know-how.
“In general, our global expansion policy is based on majority equity acquisitions rather than starting projects from scratch. We aim at buying the remaining 48% stake in Barnett McCall within the coming 4-5 years, the bid offer following to be drawn based on the company’s performance until then”, said the CEO of Gi Group.
The calculation methodology used for the purchase bid for BMR was based on an EBITDA 5-7 multiple and reached 1-1.5 million euros, according to Colli Lanzi. “Before crisis, the EBITDA multiple we offered to companies was much higher than the offers we are willing to make from now on”, said Colli-Lanzi who added that negotiations for buying BMR lasted nearly four months.
For 2009, Gi Group expects BMR’s turnover to shrink 30% from 2.5-2.6 million euros a year earlier. “In the early months of the year, the turnovers of the group’s foreign branches fell even 70% so we have no reason to expect a good year ahead”, said the CEO of Gi Group. In Romania, the Italian group will focus on providing temporary placement services as well as recruitment and selection for entry and middle management positions.
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