CPL agrees €318m takeover by Japan’s Outsourcing Inc

Recruitment group’s founder CEO Anne Heraty and husband set for €110.9m pay day

CPL Resources, the recruitment company led by Anne Heraty, said on Wednesday that it has agreed to be taken over by Japanese group Outsourcing for almost €318 million in an all-cash deal.

Ms Heraty and her husband and fellow director, Paul Carroll, are in line to receive €110.9 million for their combined 34.9 per cent stake in the business. They plan to stay on board after the transaction is completed, subject to shareholder approval.

The value of the bid marks a 36.4 per cent premium to CPL’s closing share price on Tuesday and is 54 per cent higher than its weighted average share price over the past three months, CPL said in a statement.

Ms Heraty, a native of Co Longford, co-founded CPL in 1989 at age 29 and became the first female chief executive of an Irish publicly quoted company a decade later when she floated the business.


CPL saw its gross profit rise by 4 per cent to €100.3 million in the year to June, driven by a strong performance in the recruitment market before Covid-19 struck its main Irish and British markets in March.

The board did not recommend a final dividend at the end of the 12-month period in light of uncertainty created by Covid-19 and the group’s aim to maintain a strong balance sheet, as it warned that the economic slowdown associated with the pandemic was being felt mainly in its business filling permanent vacancies.

The company, which focuses mainly on the financial services, technology, healthcare and pharmaceutical sectors, said its temporary vacancies business was proving more resilient.

CPL attracted negative headlines in 2018 when a Channel 4 Dispatches documentary showed its staff who were hired out as content moderators to Facebook in Dublin were being instructed not to remove extreme, abusive or graphic content on the US group’s website even when that content violated the social media company’s guidelines. CPL says it took “immediate action” when it became aware of the allegations, include refreshing staff training.


CPL, which has a workforce of almost 13,000 across 45 offices worldwide, revealed in documents relating to the Outsourcing deal that it held a “series of discussions” in March about a potential takeover by the Japanese group. That was at a time when Covid-19 was sweeping through Europe.

While CPL said its board “remain confident” that it is still on course to “deliver significant value” for shareholders as an independent company, a takeover would allow it to tap the global scale and expertise of Outsourcing and accelerate the Irish business’s own “international strategy to service existing and new clients and candidates”.

“The CPL directors believe the terms of the acquisition acknowledge the quality of CPL and the strength of its future prospects, both standalone and as part of Outsourcing, represent an attractive premium in cash and crystallise the substantial long-term value potential of CPL today,” the statement said.

Goodbody Stockbrokers analyst Gerry Hennigan said the Outsourcing offer was an “attractive one” for shareholders.

"Outsourcing is a leading human resources business, with headquarters in Japan and consists of 200 companies with more than 300 locations in Japan comprising 80,000 employees," Mr Hennigan said. "Outsourcing do not currently have a presence in Ireland and will likely leverage off CPL's existing base."

The deal is being structured as a so-called scheme of arrangement, which will require the approval of at least 75 per cent of shareholders at an extraordinary general meeting and approval from the High Court in Dublin. The deal is expected to be completed by the end of January.

Shares in CPL soared as much as 35.8 per cent to €11.20 on Wednesday morning, to within a whisker of the €11.25 Outsourcing offer price.

Investment bank Rothschild is acting as financial adviser to CPL on the deal. Davy is the company’s joint corporate broker. William Fry is acting as legal adviser to the firm.

Outsourcing has retained Nomura as financial adviser and McCann FitzGerald in Dublin to provide legal advice. Filings with the Companies Registration Office show that the Japanese group set up Outsourcing Talent Ireland Limited, the vehicle being used to execute the deal, at the end of August.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times