In dire financial straits, the digital temping specialist had accumulated a mountain of debt. Proman, a family-owned group specialising in the temporary employment and human resources markets, immediately stepped in to take over the company. Experts at AURIS Finance, a consultancy specialising in mergers and acquisitions, take a closer look.
At the end of August, news broke that Iziwork was in serious financial trouble. According to the website l’Informé, the leading digital temp agency owes €16 million in VAT and social security contributions. It also owes €10 million in bank debts, including a state-guaranteed loan. And yet, in 2022, the group announced – through the voice of its CEO to the daily Les Echos – that it had achieved profitability in France. By 2022, the group had managed to place 50,000 temporary workers with its 2,000 corporate clients, including big names such as Carrefour, Fnac Darty, and Casino. With an annual recurring turnover of €300 million, Iziwork has set itself ambitious development targets to conquer Europe. To achieve this, the innovative company has raised several rounds of funding, bringing the total to €55 million.
A model in need of redefinition
While the disruptive model enabled by the combination of digital technology and artificial intelligence has won over investors, the financial performance has been less stellar than expected. “Much of Iziwork’s strong growth was achieved by signing either unprofitable or not very profitable contracts with big clients. In order to manage these tripartite contracts, Iziwork delegates a large part of the tasks normally carried out by traditional temporary employment agencies to independent contractors, known as Iziwork ‘partners’, with whom it has to share part of the fees,” a source close to the matter told l’Informé website. The group’s results have been badly affected by low-paying contracts and payments to third parties. The association of temporary employment agencies, Prism’emploi, has distanced itself from those new players. “Human labour is not a commodity like any other,” Isabelle Eynaud-Chevalier, executive director of Prism’emploi, told Les Echos Entrepreneurs.
Proman strengthens its development
With the acquisition of Iziwork, Proman is expanding its sphere of influence. The group has made a number of acquisitions in recent months. Some twenty in all, including a number of international temporary employment agencies such as the Dutch company Timing. With operations in 16 countries, Proman has 47,000 corporate clients and is expected to generate sales of €4.15 billion in 2023. With the takeover of Iziwork, Proman has embraced cutting-edge digital technology and positioned itself as a challenger to the giants of the sector. The major temporary employment and human resources groups are already shopping around for start-ups. In September 2021, for example, the Adecco Group acquired the 100% digital temporary employment platform Qapa. In 2022, it was Randstad France’s turn to move into digital services by acquiring Side.
Our experts at your side
With the development of artificial intelligence, the temporary employment sector is not immune to a rethink of its business model. To position themselves in a fast-changing market, companies need to move quickly while keeping a close eye on their financial performance. In this context, finding financial partners is key. AURIS Finance has a dedicated department for temporary employment companies. Whether you’re looking for a buyer or a new target to acquire, our experts can assist you.
