TIDMEMR
RNS Number : 8236L
Empresaria Group PLC
06 October 2016
6 October 2016
Empresaria Group plc ("Empresaria")
Investment in ConSol Partners
Empresaria (AIM: EMR), the international specialist staffing
group, is pleased to announce the investment in a 65% interest in
ConSol Partners (Holdings) Limited ("ConSol").
Investment highlights:
-- Empresaria has agreed to purchase 65% of ConSol for a total
cash consideration of approximately GBP9.4 million. The remaining
35% interest is held by the senior management team, in line with
Empresaria's management equity philosophy.
-- ConSol is a specialist recruitment group in the IT sector
with a focus on the niche sectors of communications & mobile,
cloud technologies and the digital supply chain, operating in the
UK, USA and Continental Europe.
-- ConSol provides both contract and permanent staffing
services, with 57% of net fee income in 2015 coming from contract
services.
-- ConSol is profitable and cash generative. During the
financial year ended 31 December 2015 ConSol achieved unaudited
revenues of GBP23.4 million, unaudited net fee income of GBP7.6
million and unaudited profit before tax of GBP1.2 million.
-- The board of directors of Empresaria ("Board") believes the
investment will be earnings enhancing on an adjusted basis in the
first full year in the Empresaria group.
ConSol overview
ConSol has a niche focus on the communications & mobile,
cloud technologies and the digital supply chain sectors of IT
recruitment having started business from a London base in 2008 and
expanded into the UK and Continental Europe, with a strong presence
in Benelux and Germany. In 2013 the business grew organically into
the US and now operates from offices in Los Angeles and Boston. The
spread of net fee income is evenly split between the three main
regions of UK, USA and Continental Europe (includes the rest of the
world). ConSol has not experienced any change in trading in the UK
since the EU referendum vote. In 2015 57% of net fee was from
contract placements.
The investment complements Empresaria's stated growth strategy
of developing leading brands in their sectors, with a business that
is already diversified geographically. The business is focused on
specialist professional roles and has a good proportion of contract
income. The niche sectors in which they operate are expected to see
strong growth opportunities in the coming years and this investment
will strengthen Empresaria's presence in the IT & Design
sector.
Alongside the strategic rationale, ConSol is profitable and cash
generative. The Board believes the investment will be earnings
neutral on an adjusted basis in the 2016 financial year and will be
earnings enhancing on an adjusted basis in its first full year in
the Empresaria group.
Summary of the investment terms
The senior management team of ConSol will retain a 35%
shareholding. In line with Empresaria's other management equity
arrangements, the shares held by management are not subject to any
put and call options; rather they are expected to be held for a
minimum holding period, in this case three to four years, before
they can be voluntarily offered for sale to Empresaria over a
minimum of a further two years.
The consideration is fully payable in cash, with an initial
payment on completion of GBP4.0m and a deferred amount, expected to
be approximately GBP5.4 million, subject to a net asset value
adjustment once completion accounts have been finalised, payable in
January 2017. ConSol has net assets of approximately GBP2.7
million.
The investment is funded by the existing multi-currency
Revolving Credit Facility of GBP10.0 million and operating cash
flows of Empresaria. With the timing of this investment late in the
2016 financial year the Board acknowledges the year end ratio of
debt to debtors will increase above its target of 25%. However, it
believes this is in the best interests of Empresaria in the
short-term due to the availability of long-term debt during this
period of historically low interest rates. Empresaria is cash
generative and the Board remains committed to returning the debt to
debtors ratio to its target of 25% by 2018.
Chief Executive Officer, Joost Kreulen said:
"We are delighted to announce another investment in a leading
brand, in line with our stated strategy, which further strengthens
our presence in IT recruitment, a market with high growth
prospects. The ConSol business is geographically diversified,
profitable and cash generative, with a good proportion of
temporary/contract business and a track record of strong organic
growth. This investment complements Empresaria's current operations
and is expected to be earnings enhancing during its first full year
with Empresaria. We are excited by the growth plans for ConSol as
part of the Group and look forward to working with the management
team to ensure we maximise the potential for the business."
Enquiries:
Empresaria Group plc via Redleaf Communications
Joost Kreulen, Chief Executive
Officer
Spencer Wreford, Group Finance
Director
Arden Partners (Nominated Adviser
and Broker)
John Llewellyn-Lloyd / Steve
Douglas / Ciaran Walsh 020 7614 5900
Redleaf Communications (Financial 020 7382 4730
PR) empresaria@redleafpr.com
Rebecca Sanders Hewett / Sarah
Fabietti-Dallison / Sam Modlin
Notes for editors:
-- Empresaria Group plc is an international specialist staffing
group with 21 brands operating in 19 countries across the globe
including the UK, Germany, Japan, India, UAE, Indonesia, Chile,
Australia, Thailand, Singapore, Finland, USA, New Zealand and the
Philippines.
-- Empresaria offers temporary/contract and permanent staffing
solutions as well as Offshore Recruitment Services in seven key
sectors including Technical & Industrial, Aviation Services, IT
& Design, Professional Services, Healthcare and Retail.
-- Empresaria applies a multi brand, management equity
philosophy and business model, with Empresaria group company
management teams holding significant equity in their own
business.
-- Empresaria is listed on AIM under ticker EMR. For more information: empresaria.com
This information is provided by RNS
The company news service from the London Stock Exchange
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