Acquisition

Released : 06/09/13 07:00

RNS Number : 3681N
Matchtech Group PLC
06 September 2013
 



 

6 September 2013

 

Matchtech Group plc ("Matchtech" or the "Company" or the "Group")

 

Acquisition

 

Matchtech Group plc (AIM:MTEC), one of the UK's leaders in specialist engineering, technology, professional staffing and employability & skills recruitment, is pleased to announce that it has acquired the entire issued share capital of Application Services Limited, trading as Provanis ("Provanis"), a  niche technology recruitment business (the "Acquisition") for a total cash consideration of £4.0 million funded from the Group's existing lending facility.

 

Provanis is a technology recruitment business with niche expertise within the Oracle Applications marketplace, and a focus on low volume, high margin international contract recruitment.  Based in London, its client base comprises predominantly large international blue chip organisations. The acquisition of Provanis will complement Matchtech's newly rebranded technology business, Connectus, and will broaden the Group's capability in the global ERP recruitment market.

 

In the year ended 31 March 2013, Provanis delivered an unaudited profit from operations of £1.0m on revenue of £14.5m and net fee income of £2.0m. Approximately 55% of that net fee income was generated outside the UK. With contract margins of 14.0% and a net fee income to profit from operations conversion ratio of 48%, Provanis's financial performance is expected to be both cash generative and accretive to Matchtech's operating margin and earnings. 

 

Under the terms of the acquisition, Matchtech will acquire 100% of Provanis for a total cash consideration of £4.0m payable on completion of the acquisition.  The Consideration is subject to a net assets adjustment such that, if the net assets of Provanis as at completion exceed £0.4m, the consideration will be increased by £1 for every £1 of such excess, up to a maximum of £1m.

 

Provanis was majority owned by its founder Mr Neale Provan, who no longer has an operational role in the business and who will leave following completion of the transaction to pursue other interests and has signed a non-compete agreement. Rajesh Thakrar, Chief of Operations, Alex Schembri, Senior Sales Manager and Robin Miller, Business Development Manager (all minority shareholders prior to the acquisition) will continue in their positions.

 

Commenting, Matchtech Group Chief Executive, Adrian Gunn, said:

 

"The acquisition of Provanis is an important step forward in the growth strategy for the Group. We are excited by the opportunities it creates to broaden our capability within the global ERP recruitment market, to generate additional contract opportunities through cross-selling Provanis's expertise to Matchtech's wider client base, and to enhance Provanis's existing client relationships through the proven permanent recruitment capability of the Group.

 

"This transaction fits well with our stated acquisition criteria - namely small, bolt-on deals involving high margin contract recruitment businesses that complement our existing activities in specialist engineering, technology and professional services staffing."

 

For further information please contact:

 

Matchtech Group plc                                       01489 898 989

Adrian Gunn, Chief Executive Officer

Tony Dyer, Chief Financial Officer

 

MHP Communications                                     020 3128 8788

John Olsen / James White / Giles Robinson

 

Numis Securities Limited                                 020 7260 1000

Nominated Adviser: Michael Meade

Corporate Broking: James Serjeant

 

 

Background on Matchtech (AIM: MTEC.L)

 

Matchtech Group has over 29 years' experience providing niche recruitment services to the engineering, technology, professional staffing and the employability & skills markets.  The group is recognised as one of the UK's leading specialist recruitment agency supplying contract, temporary and permanent staff.

 

Website: www.matchtechgroupplc.com

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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