8th Dec 2015 09:02
LONDON (Alliance News) - Impellam Group PLC Tuesday said it has signed an agreement to acquire Bartech Holding Corp for an initial USD120.0 million to expand its US offering and said the acquisition will enhance its earnings in the next financial year.
The staffing business will make the initial payment using USD115.4 million in cash drawn down from its four-year, USD250.0 million revolving credit facility, with the remaining USD4.6 million being satisfied through the issue of 401,866 new shares to the sellers of Bartech, equating to a price of "approximately" 767.5 pence per share, it said.
Impellam shares were trading up 1.8% to 781.00p per share on Tuesday morning.
The consideration shares will have a lock in period varying between one to three years and a further deferred consolidation of up to USD6.0 million could be paid in cash dependent on Bartech's performance. That deferred payment, if made, would be made no later than April 2018.
Southfield, Michigan-based Bartech is a workforce management and staffing business founded in 1977 and providing customers with consultation services, managing USD3.00 billion worth of client funds. Bartech has 3,000 employees and works on a worldwide scale, boasting many Fortune Global 500 companies as clients.
Impellam said Bartech is "culturally aligned" with its vision to become "the world's most trusted staffing company" and will increase its US business and improve the group's conversion of gross profit to earnings before interest and tax.
The acquisition is expected to materially earnings enhancing in the first full year of ownership, the company said, suggesting Impellam shareholders will see the effects in the company's financial year due to end January 2, 2017.
Bartech is expected to make Ebitda of around USD12.8 million in the year to end December 31, which would be a rise from USD9.6 million a year earlier, with revenue rising to USD272.0 million from USD226.0 million.
Bartech Chief Executive David Barfield will join the board of Impellam, heading up Impellam's North American businesses, including Bartech. Mike Bixler, Impellam's current head of North America will become managing director of Impellam's Specialist Staffing division.
In addition, Impellam said trading since its half-year results has remained in line with management expectations, but warned there is "significant disruption" being caused in the English healthcare market due to government announcements concerning caps on locum pay rates and agency margins, which may have a "short term financial impact on our healthcare businesses", it said.
"Despite this, we remain confident that our strategy of reducing our reliance on the UK market, and our market leading position in Managed Services, where we support the NHS to reduce its total cost of agency workers, will enable our healthcare businesses to outperform the market over the medium to longer term," said Impellam.
By Joshua Warner; [email protected]; @JoshAlliance
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