market news article3 Feb 2017 18:39
Gattaca, the specialist engineering and technology recruitment agency, has acquired a majority stake in Resourcing Solutions Limited, a niche engineering recruitment business. RSL, which was founded in 1996, operates from offices in Reading, Uxbridge and Derby, providing specialist contract and permanent candidates to companies operating in the rail, power and built environment sectors.
RSL is expected to generate NFI of £7.5m and underlying EBITA of £2.0m in the 12 months to 31 January 2017.
Over the same period approximately 88% of RSL's net fee income ("NFI") was generated from contract placements, with the balance from permanent recruitment fees. The acquisition is expected to be immediately earnings enhancing for Gattaca.
Under the terms of the acquisition, Gattaca's wholly-owned subsidiary, Matchtech Group (Holdings) Limited, will initially acquire 70% of RSL's issued share capital for £6.9m from founder and chief executive Richard Lawrance and Alysoun Stewart, an investor in RSL.
The remaining 30% is subject to a put and call options exercisable from 12 months post-completion for 5.0x trailing EBITA at that time.
The maximum total consideration payable is £15.0m.
All consideration is payable in cash and will be funded from the Group's existing resources.
The group will take on RSL's existing working capital finance facilities, expected to be approximately £4.0m at 31 January 2017. Lawrance will continue as CEO of RSL following the acquisition and the existing management of RSL will also remain in place.
Gattaca also announced that it had delivered solid results in the six months to the end of January during a period of "some instability in the UK, following the EU referendum on 23 June".
The group said it continued to position itself for maximising growth opportunities both in the UK and internationally.
It added: "Accordingly, whilst the Board continues to monitor uncertainty in the wider economy, we continue to invest selectively in strengthening the business to support its medium and longer term performance."