Best Funding Solution Winner: The Adecco Group

Published: Jul 2022


Photo of Liam Ó Caoimh, Estefania Rodriguez, The Adecco Group, Thierry Bastos, Societe Generale, Manuel Gerber and Christoph Furter, The Adecco Group.

Liam Ó Caoimh

VP Treasury

The Adecco Group, based in Zurich, Switzerland, is one of the world’s largest human resources providers and temporary staffing firms, and a Fortune Global 500 company.

in partnership with

Adecco’s diversified funding mix acquires AKKA Technologies for €2.2bn

The challenge

The challenge was simple; to fund the landmark acquisition of AKKA Technologies.

The solution

Adecco took advantage of a post summer issuance window and was able to achieve market-leading terms across its three bond tranches. On 6th September 2021, Adecco successfully raised approximately €230m through the placement of 5,100,000 new shares at a price of CHF49.60 per new share.

Less than a week later, on 14th September 2021, Adecco (Baa1/BBB+) returned to the EUR market to price a €1.5bn three-part offering across €500m seven-year and €500m ten-year senior tranches and a €500m debut hybrid (instrument rating Baa3/BBB-). Initial price targets were set at 1.625% area (for the hybrid), MS1+65-70 area (for the seven-year) and MS1+80-85 area (for the ten-year).

With hybrid/senior orderbooks exceeding €2.75bn/€3.75bn at guidance, Adecco was able to leverage pricings 0.375% tighter on the hybrid and 20-30 bps tighter across the senior tranches. Guidance was later released at 1.250% (+/-0.125%) and MS1+45 and MS1+55 bps area respectively. Final terms were then set at the tight end of guidance for the hybrid (1.125% yield equating to a +109 bps sub-senior spread) and 5 bps inside guidance across senior tranches (MS1+40, MS1+50 bps). Final pricings represented coupons of 0.125% and 0.500% on the senior tranches, the lowest ever achieved by Adecco for its largest ever senior bond (representing concessions between -5 to 0 bps). Hybrid pricing of 1.125% yield represents the lowest BBB rated debut hybrid priced since at least 2014, with a 1.000% coupon representing the joint second lowest ever priced for a EUR corporate hybrid over the same period.

The books were covered within 45 minutes of announcement, with high granularity and quality of investors supporting optimal allocations. Adecco had pre-hedged the combined senior and hybrid issuance (€1.5bn) directly after the announcement in late July resulting in significant unwind gain on the day of issuance.

“We financed the AKKA acquisition of €2.2bn at 0.6% average cost of debt,” explains Liam Ó Caoimh, VP Treasury.

Best practice and innovation

Best practice is for a diversified funding mix and this funding solution had cash, conventional bonds, hybrid bonds and equity. As the hybrid bond was innovative and inaugural for Adecco, this really tested Adecco’s knowledge on the tax and rating agency treatment. Group treasury organised weekly calls with the internal stakeholders to build buy-in and to keep momentum going in the preparations through the summer vacation period getting ready for the first available issuance window. The acquisition opened a fundamental discussion on the financing mix, it wasn’t a done deal to just issue straight bonds as in previous non-acquisition financings. The whole treasury team was charged with developing and finalising the proposals to the CFO, CEO and Board. These interactions laid out in detail the pros/cons, both qualitative and quantitative, of decisions such as the financing mix, including equity or not, stopping the share buy-back, permanency of the hybrid, duration of the M&A call in the bonds, issuing entity, tenors, syndicate formations, credit rating guide-paths, and pre-hedging the bond issuances or not.

Key benefits

  • Cost savings.
  • Risk mitigated.
  • Future proof solution.

“We think this funding is one of the most successful and efficient acquisition financing case studies in the capital markets. Most importantly, our team had speed and competence to achieve all of this within a matter of only six weeks from start to finish,” recalls Ó Caoimh.

  1. Mid-swap (MS) is the average of bid and ask swap rates used as a benchmark for calculating total interest rate cost of issuing a variable rate bond.
The Adam Smith Awards is the industry benchmark for best practice and innovation in corporate treasury. The 2022 awards attracted 230 nominations spanning 34 countries. To find out more please visit:

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