Michael Page International plc
Michael Page International plc
39-41 Parker Street
London WC2B 5LN
Telephone: ( + 44) 20-7831-2000
Fax: ( + 44)20-7269-2121
Web site: http://www.michaeIpage.co.uk
Incorporated: 1976 as Michael Page Partners
Sales: £426.89 million ($637.2 million) (2000)
Stock Exchanges: London
Ticker Symbol: MPI
NAIC: 561310 Employment Placement Agencies
Michael Page International plc (MPI) is one of the world’s leading recruitment companies. Based in London, with 100 offices operating in 14 countries, MPI targets primarily higher-paid, white-collar, permanent positions in the financial, banking, accounting, legal, marketing and sales, human resources, and IT sectors. The company’s targeted annual pay rates range from £25,000 to £100,000. Nearly 80 percent of MPF's business is in permanent position placement, although the company has a significant business in temporary and contract hire, which helps to cushion the company somewhat during hiring downturns. The company’s origins as a specialist in the accounting and financial sectors continue to show in its business in the new millennium: more than 70 percent of MPF's revenues are generated in these two sectors (banks account for about 10 percent of sales). Marketing and sales provide an added 15 percent of the company’s business. MPI has long played the international field, although nearly half of its revenues are still generated in the United Kingdom. France is its next strongest market, which, together with the rest of Europe, add an additional 37 percent to the company’s sales. MPI has targeted the Asia/Pacific region for growth, with expanding its presence in Australia and Hong Kong and other markets and an entry into Japan in 2001. The company has a minor presence in the United States, which represented only 2 percent of its sales in 2,000, although MPI expects to grow in that market with the establishment of a new office in New Jersey in 2001. A short-lived subsidiary of Spherion (formerly Interim Services), the company was spun off in a public offering at the beginning of 2001, with a market capitalization of more than £650 million. Leading MPI is CEO Terence W. Benson, a former accountant-turned-recruitment specialist.
Career Hunters in the 1970s
MPI was founded in 1976 by Michael Page and Bill McGregor. Accountants with experience working for the oil industry, the pair had met while looking for work in one of England’s notorious employment agencies following the economic crash of the mid-1970s. Page and McGregor reasoned that there was room for a better breed of employment placement service and, using £10,000 obtained in a bank loan, set up their own company, the Michael Page Partnership, in London.
Page and McGregor initially targeted two areas they knew well: accounting and the oil industry. Over the next several years, however, the company’s increasing success at filling positions led it to expand its accountant placement services to the other industries. The company also expanded geographically, adding offices in Birmingham, Glasgow, Leeds, Manchester, and Bristol. In 1979, the company was joined by a new employee, Terence Benson, an accountant who arrived seeking the company’s services. Instead, Benson was hired by MPI itself as a recruitment specialist; over the next decade, Benson was to work his way up through the company’s ranks, finally being named CEO in 1990.
Going Public and Diversifying in the 1980s
At the beginning of the 1980s, MPI was posting some £1.5 million in annual turnover. The company made its first public offering, placing its shares on London’s Unlisted Securities Market in 1983. The following year, MPI began its first external growth effort, merging with Chetwynd Streets Plc. In 1985, however, the company sold out to growing business services group Addison Communications. The company’s new parent changed its subsidiary’s name to Addison Page.
The newly renamed company now had deeper pockets with which to pursue its international growth. The company set up offices in a number of new markets, beginning with Australia in 1985. Closer to home, the company targeted France in 1986 for its expansion onto the European continent. The company also added a number of new offices in the United Kingdom. At the same time, Addison Page began to diversify, extending its recruitment services into the banking and finance industry in 1985 and adding a legal recruitment wing in 1986. The company also began moving into the marketing and sales sector. In 1987, Addison Page crossed the Channel again, opening offices in The Netherlands.
The company’s time as an Addison subsidiary proved shortlived. In 1988, as the world markets plunged toward a new economic downturn, Addison began breaking up its consultancy. MPI was spun off in 1988. Michael Page, taking up the position of chairman and CEO of the newly independent company, took it public that same year, now floating it on the London main board as the Michael Page Group.
Growth Through Expansion and New Markets: 1990s and Beyond
The company returned to independence at a low point for the recruitment industry in general, as the severe economic times dipped into a recession at the beginning of the 1990s. Nonetheless, Michael Page’s policy of maintaining a significant treasury enabled the company to ride out the lean times of the early years of the decade. By then, Terence Benson had been appointed as company CEO, while Michael Page continued with the company as chairman. Benson remained committed to the combination of organic growth and careful international expansion that had marked the company’s growth, taking Michael Page Group into Germany in 1991. The company began establishing a presence in the soon-to-boom technology market at the same time.
As the company eyed a return to growth of the recruitment market, it created a number of dedicated business units, including Accountancy Additions in 1992 and Michael Page Sales in 1994; another unit was formed in 1997, called Michael Page Retail. Each unit targeted a specific market sector.
Founder Michael Page retired in 1994, selling out his shareholding in the company. With the economy revving up once again, Benson continued the company’s international expansion, opening an office in Hong Kong in 1995 and in Singapore in 1996. At the end of that year, the company’s sales neared £104 million. The company also became interested in expanding into the United States.
An offer from Interim Services, Inc., one of the United States’ largest recruitment agencies, gave Michael Page Group the opportunity it was seeking. In 1997, Michael Page agreed to be acquired by Interim. The deal, which cost Interim £346 million, removed Michael Page from the stock market for a second time. The wisdom of the deal was later called into question—Interim targeted temporary and primarily blue-collar positions, as opposed to Michael Page’s emphasis on junior-and senior-level permanent management positions.
The Group’s objective is to establish Michael Page as the leading professional recruitment consultancy in each of the markets and disciplines in which it operates.
- Michael Page and Bill McGregor found recruitment agency Michael Page Partners (MPP), specializing in accountancy positions for the oil industry.
- The company makes its initial public offering on the Unlisted Securities Market.
- MPP merges with Chetwynd Streets Plc.
- Company is acquired by Addison Communications Plc, which changes the company’s name to Addison Page Pic; the company adds an office in Australia; services are expanded to include financial and banking positions.
- The company opens an office in France, which becomes one of company’s primary markets; the company expands into the legal industry.
- The company opens offices in The Netherlands.
- Addison spins off the company as the Michael Page Group, with a listing on the London stock exchange.
- The company opens offices in Germany.
- The accountancy business is grouped under Accountancy Additions.
- Michael Page retires, selling out his shares in the company; the company regroups its sales and marketing division as Michael Page Sales.
- The company opens offices in Hong Kong to begin expansion into Asian markets.
- The company expands further into Asian markets with the opening of an office in Singapore.
- The company agrees to be acquired by Interim Services, Inc. (later Spherion Corporation) in order to expand into the U.S. market; the company establishes a dedicated retail division; offices in the United States, Spain, and New Zealand are opened.
- The company opens offices in Italy.
- The company expands into Brazil, and opens offices in Switzerland and Portugal.
- Spherion spins off the company as Michael Page International, with a new listing on the London stock exchange; the company opens a new office in the United States; the company expands into Japan.
Yet under the acquisition agreement, Michael Page remained an autonomous company, with its top management, including Benson, left in place for the most part. Under Interim, which continued an aggressive acquisition spree, Michael Page was able to proceed with its international expansion, not only establishing a base in the United States, but also new offices in Spain and New Zealand and then, in 1998, in Italy. Yet the marriage was not considered a successful one, as the two companies’ cultures clashed, and Page’s expansion into the United States remained limited.
At the end of the decade, Michael Page group operated from more than 90 offices worldwide. Its sales had been rising strongly as the economy returned to health not only in its core U.K. and European markets, but worldwide as well. From 1998 sales of £255 million, the company had climbed to nearly £427 million in 2000. In that year, the company had continued its international growth, opening offices in Brazil, Portugal, and Switzerland. It also had moved to establish its presence in a growing new recruitment category, that of human resources, creating a dedicated HR division in 2000. Another new market for the company was added at the same time, as the company formed its Michael Page Engineering unit.
Interim Services changed its name to Spherion in 2000. Burdened by a heavy debt load, Spherion announced its intention to spin off Michael Page—now as Michael Page International—to the public market early in 2001 in order to pay down some of its debt. The offering was originally announced in a range of 190p to 250p per share, which would have valued the company at the upper end at nearly £1 billion. Yet with fears of a new U.S. recession shaking the markets’ confidence, the company was forced to lower its target price; when the company at last returned to the market, its value stood at just £656 million. Spherion sold nearly 90 percent of its holding at the time of the IPO, and the remainder one month later.
Soon after the IPO, the company faced new troubles. In June 2001, the company was forced to issue a profits warning, which in turn sparked an investigation by the U.K.’s Financial Services Authority into whether the company misled stockholders at the time of its flotation. The company was cleared of any wrongdoing later that year.
In the meantime, the continuing tough economic climate in the United States—where a number of major corporations were announcing large-scale layoffs—was shaking up the corporate community elsewhere in the world. Corporations in most of MPF's key markets had instituted hiring freezes as analysts began to forecast a new international recession. The company was forced to issue a new profits warning in October of that year—and admitted that it had itself instituted a hiring freeze.
The company had not, however, put a freeze on its growth. By the end of 2001, the company had opened its first office in Japan, hoping to tap into the trend in that country of turning away from its former “employment-for-life” corporate culture toward a more dynamic market where MPF's services would be in greater demand. At the same time, MPI began new moves to build a presence in the United States, opening an office in New Jersey. The United States nonetheless represented only 2 percent of the company’s turnover. Meanwhile, as the economic picture began to brighten at the end of the year, the company began plans to expand into a new area in Europe, with the opening of an office in Stockholm slated for early 2002.
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Baker, Lucy, “Michael Page Cuts IPO Price As Slowdown Fears Hit Take-Up,” Independent, March 29, 2001, p. 19.
Felsted, Andrea, “Michael Page Cleared Over Profit Warning,” Financial Times, December 12, 2001.
Martinson, Jane, “Headhunter Saddles Up for Takeover Hurdle,” Financial Times, March 7, 1997.
Mills, Lauren, “Michael Page Set to Move into Japan,” Telegraph, March 11, 2001.
Tomlinson, Heather, “Michael Page Leaves US Parent in the Shade,” Independent on Sunday, March 11, 2001, p. 2.
Treanor, Jill, “Michael Page Chief Rounds on Critics,” Guardian, August 15, 2001.
Wootliff, Benjamin, “Michael Page Bucks the Slide on Debut,” Telegraph, March 29, 2001.