Hays acquires 80 per cent of Veredus Corp.
This option is first available for exercise in March 2018, at a pre-determined multiple of earnings, and is subject to a cap.
Veredus is a pure-play IT staffing company that generates c.85% of its net fees from contracting and temporary assignments and c.15% from Perm placements. Established in 2000, it is headquartered in Tampa, Florida, with 10 offices focused in the South East and Mid-West of the USA. It has 150 employees and over 700 contractors currently active on assignments with a broad range of clients, and in the last year made placements across 30 states.
Veredus has a high quality, experienced leadership team, who will retain a 20% ownership in the equity of the business for the next three years, and are committed to driving continued long-term success for their business, employees, candidates and clients as part of the Hays Group.
Veredus made an adjusted EBITDA in the year ended June 2014 of c.$6.7m (c.£4.2m) which, after taking account of net debt within the business at the time of the transaction of c.$4m, implies a multiple of c.9x earnings. After taking account of deal associated costs which, in line with accounting rules, will be 100% expensed in the year, it is expected that the transaction will have a minimal impact on the Group’s earnings for the year to June 2015.
Commenting on the transaction, Alistair Cox, Hays CEO, said, “I am delighted to announce this important transaction for Hays. Since entering the US market in late 2010, the Hays business has rapidly expanded, providing specialist recruitment services in the Life Sciences and Oil &
Gas sectors, with offices in New York and Houston. Veredus’ clear, market-leading focus on IT Contracting and their established platform across the South East and Mid-West, alongside deep existing client relationships across a range of sectors makes it highly complementary to our existing North American and global operations.
"The acquisition of Veredus provides the ideal platform for us to import our complementary recruiting expertise and relationships from across the Group, driving diversified growth and better serving our many clients for whom the USA is a key market. By adding the existing market-leading business and quality leadership team that Veredus brings, we enter the next phase for Hays in the USA with a clear plan to significantly accelerate our growth trajectory in this key market. I welcome the entire Veredus team to Hays and look forward to a long and successful shared future.”