Acquisition and trading update

27 November 2013

InterQuest Group plc

("InterQuest" or the "Group")

Acquisition of ECOM Recruitment Limited and trading statement

IT staffing specialist, InterQuest Group plc (AIM: ITQ.L), is pleased to announce the acquisition of ECOM Recruitment Limited ("ECOM"), the UK's leading digital technology recruitment business for a total consideration of up to £7.04 million.

Founded in 1999, ECOM has built a leading brand within the digital space and recruits for many of the Top 100 (New Media Age) list of digital agencies. They also work with a number of recognisable brands in the UK including Retailers, DotCom businesses, Media, Publishing and FMCG businesses. ECOM's core strengths are Creative, Content, Technology, User Experience, Client Services, Digital PR & Social Media, Project Management, Web Analytics & Digital Marketing. With a team of digital recruitment specialists operating from offices in Marylebone, co-founders Tim Fleetwood and Vincent O'Shea have guided ECOM through an exceptional period of growth in the digital industry. Tim Fleetwood will remain with the business as ECOM's managing director. InterQuest, which is a leading recruiter for employers seeking specialist skills in information technology, has been building capability within its IQ Digital recruitment business. ECOM accelerates this capability to a market leading level. In addition ECOM has a customer base which provides InterQuest's specialist businesses with incremental opportunities in areas such as analytics, ERP, technology sales and telecoms.

Terms of the Acquisition

InterQuest will pay an initial consideration of £3.54m comprising £3.04m in cash and £0.5m by the issue of 558,659 new InterQuest shares issued on completion. A further deferred consideration of £2.16m is payable by way of a loan note with a 3% coupon of which £0.5m is payable in May 2014 and £1.66m in December 2014.

In addition, up to a further £1.34m subject to an earn-out could be payable in December 2014 if the business achieves £1.34m of EBIT in the year to 31st October 2014.

In the year ended 31st March 2013, ECOM reported adjusted EBIT of £0.85m and had net assets of £0.8m.

The acquisition will be financed from the Group's existing bank resources.

The 558,659 new InterQuest shares are being issued to the vendors of ECOM at a price of 89.5 pence per share. Application will be made to the London Stock Exchange for these shares to be admitted to trading on AIM and it is expected that dealings will commence on 3 December 2013. These shares will rank pari passu in all respects with the existing issued ordinary shares in the Group. The Group's enlarged issued ordinary share capital immediately following the issue of these shares will be 34,050,432 ordinary shares. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in interest in, the share capital of the Group under the Disclosure and Transparency Rules.

Current trading

2013, so far, has been an excellent year for InterQuest especially within the UK markets in which we operate. The board has been encouraged by the performance in the UK where the benefits of a focused approach are clearly being seen. Our business in Singapore has continued to experience difficulties and its contribution was not what the board expected. However, given the very pleasing performance in the UK, trading for the Group is in line with management's expectations and the targeted acquisition of ECOM, along with the associated cross marketing opportunities it will provide across the Group, gives us a strong platform for growth in 2014.

Gary Ashworth, Executive Chairman of InterQuest, commented: "We are delighted to have the talented team at ECOM on board. Not only are they the recognized market leader in digital recruitment they are a great operational and cultural fit too and I can see significant incremental benefits to the group."

Mark Braund, Chief Executive noted: "This acquisition drives at the heart of what we do. The addition of ECOM to our stable of niche and specialist recruitment businesses will help InterQuest rapidly answer the challenges faced by our most important clients planning or working on digital-based projects."

For further information, please contact: