The Italian staffing company Gi Group has bought out the 49 per cent stake of its Indian joint venture partner Elixir Consulting. The co-working arrangement between Gi Group and Elixir began in 2008 which signalled Gi’s first operation in India. At that point the company held a 51 per cent stake in the operation with Vipul Prakash, managing director of Elixir holding the remaining share.
Davide Riboni, Country Head (India), Gi Group explains the company’s tactics here: "When we enter any new market, our strategy is to buy some stake in the company. After few years of business operations and evaluation of future potential, we decide to increase the stake or acquire it (the JV) completely. The current deal is a part of the same strategy.”
Prakash started Elixir in 2000 as a firm focused on mid-level hiring and recruitment process outsourcing (RPO). He started another company called EWS Search in 2009, which looked at executive search segment. Along with the deal will come a change of management and a new CEO is expected to arrive at Elixir. Prakash will remain a board member, but will not be involved in running the company.
This deal is expected to be the start of more merger and acquisition activity in the market. Adecco, for example, bought Ajinkya in 2008 to enter blue collar staffing space while TeamLease acquired IIJT to work in the vocational training segment. It seems Gi Group are not yet finished with their programme of acquisitions either: "We will be looking at more acquisitions across the sectors in India to strengthen our presence,” said Riboni. “The acquisitions would carry the objectives of reinforcing our current business as well as building capabilities to provide our customers with other affiliated services.”