InterQuest Group plc
InterQuest Group plc
Acquisition of Contract Connections Limited
IT staffing specialist, InterQuest Group plc (AIM: ITQ.L), is pleased to announce the acquisition of Contract Connections Limited ("CCL"), a technology staffing business specialising in the provision of contract and permanent IT personnel to the legal sector. The acquisition will be for a total consideration of up to 4.6 million and is expected to be earnings enhancing in the first full year of ownership.
Founded in 1997, CCL has offices in London and Dublin. The acquisition is expected to strengthen InterQuest's offering to the legal sector, while providing additional geographical reach for the Group.
CCL generated revenue of 10m in the year ended 31 May 2011 and a normalised profit before tax of approximately 750,000. The acquisition is expected to add 170 contractors to the InterQuest business (1,091 at 31 December 2010). CCL also has a strong Managed Services Division, which is an area of the recruitment market identified by InterQuest as high growth.
Justin Madgwick (founder) and Louis Lafferty, both Directors of CCL, will join InterQuest's operational management team.
Terms of the Acquisition
InterQuest will pay an initial 3.70m in cash and 296,000 in InterQuest shares on completion and up to a further 600,000 over the next two years, contingent upon an average of the first and second year's earnings. The acquisition will be financed by the Group's existing bank resources. The deferred consideration is payable in cash. The InterQuest shares are being issued to the vendors of CCL at a reference price of 63.5 pence per share and according application will be made for the shares to be admitted to AIM on 29th June 2011.
Gary Ashworth, Executive Chairman of InterQuest, commented, "We are delighted to welcome the CCL team into the InterQuest Group. CCL's successful growth in recent years as a provider of technology professionals to leading law firms has been impressive and we believe that the company will prosper yet further as part of the enlarged InterQuest Group. This acquisition is very much in line with our acquisitive growth strategy, in which we are seeking to add profitable IT recruitment businesses with expertise in specialist areas. CCL's reputation in the Legal industry is outstanding and will bolster our offering in this area.
"This is our first acquisition since 2007 and is an indication of our growing confidence of a return to growth within the technology recruitment sector."