Trust Tech acquires MTrec
MTrec Ltd, one of the North East’s leading providers of staffing and training solutions, has been acquired by Japanese-listed, Trust Tech Inc., in a £17.1m deal that will create several hundred jobs in the North East.
The acquisition, which completed on 30th August, is Trust Tech Inc.’s first strategic acquisition in Europe and will provide a foundation for further acquisitions on the continent. The company plans to work closely with MTrec’s existing management team to create a truly global staffing and training solution by bringing together their collective resources, expertise and experience.
In the financial year ending 31st March 2016, MTrec achieved turnover of £46m and is forecasting turnover of £59m during the current financial year. The company, which currently employs 56 staff and a cohort of 2,500 temporary workers, expects its headcount to increase over the coming months in line with the forecast turnover growth, creating opportunities for temporary workers across the region and new positions within MTrec.
The increase in MTrec’s headcount will coincide with the opening of new on-site operations and branches outside of the North East.
MTrec was identified as Trust Tech Inc.’s first European strategic partner due to its exceptional growth rate and geographical location, which means it is ideally placed to serve the multinational manufacturing and engineering businesses based in the North East.
Established in 2006, MTrec Ltd serves the manufacturing, engineering and industrial sectors. Its wholly owned subsidiary, MTrec Care Limited, provides nurses, carers and support workers to the North-East’s care sector.
With offices throughout the North East, the business was founded by directors, David Musgrave and Rob Armstrong, and works with blue chip clients across industries including aerospace, automotive and fast moving consumer goods (FMCG).
Musgrave will remain as managing director and will retain a 15% equity stake in the business; the existing management team, including James Doyle and Chris Salkeld, will also continue in their existing roles.
Trust Tech Inc. is a Japan-based staffing business specialising in the provision of dispatching, outsourcing and sub-contracting staffing solutions. The company is currently executing a growth strategy, emphasising both organic growth and aggressive acquisition.
Advising on the sale, on behalf of the directors of MTrec Ltd, is Carl Swansbury, partner at Ryecroft Glenton Corporate Finance, supported by Alex Simpson, Simon Hopwood and Charlie Burton. Legal advice is being provided by Duncan Reid and Kirsty Adamson of national law firm, Watson Burton.
Trust Tech Inc. is being advised by Philip Ellis of Optima Corporate Finance working in partnership with Yoshiharu Ohi, CEO of Global Business Consulting Corporation in Japan. Financial due diligence was carried out by Grant Thornton led by Dan Rosinke. Legal advice is being provided by Osborne Clarke’s Matthew Bodfield and Kevin Barrow.
yutaka nishida, president and Chief Operating Officer of Trust Tech Inc., said, “It is our highest delight to welcome MTrec to our group. We are covering different geographic areas of the world and can jointly grow faster."
Musgrave commented, “The completion of the deal marks the beginning of a new and exciting chapter at MTrec that will see us invest heavily in our operations to develop our service provision even further. The combined knowledge of MTrec and Trust Tech Inc. will enable us to deliver further growth by offering our clients training and staffing solutions on a regional, national and international basis”.
Swansbury added, “David, Rob, Chris and James have built a remarkable business that has served the North East well over the past ten years. Now, with the support of Trust Tech Inc., it will be able to draw upon a significantly increased resource base to further its reach and serve new and existing clients better.
“The completion of the deal is very positive for MTrec and its shareholders as well as the North East, which will benefit from Trust Tech Inc.’s programme of investment that will create jobs and opportunities for the region’s labour force. It also serves as proof that overseas trade buyers still see the UK as an attractive option for inward investment – contrary to many of the experts’ initial predictions following the result of the European Referendum.”
Reid stated, "We're delighted to have brought our expertise in managing high level acquisitions to bear for MTrec and to have helped the firm move into a new era.
"MTrec is a true North East success story, with a customer base that already features many global operators – it's therefore no surprise that Trust Tech chose the firm as its first European strategic partner.
Ellis concluded, ”We are delighted to have advised Trust tech on this important strategic acquisition in the UK. Our partnership with GBCC enabled us to jointly advise on the deal, managing both the Japanese and UK aspects of the transaction from our client’s perspective. We anticipate this deal creating value for all stakeholders and enabling Trust Tech to extend their footprint to the UK and European markets in due course. The quality of the management team was a crucial determining factor in Trust Tech’s evaluation of MTrec.”
Photo: (L-R) Rob Armstrong, Co-founder and Director, MTrec, Carl Swansbury, Partner, RGCF, James Doyle, MTrec (front row), Yutaka Nishida, President and Representative Director, Trust Tech Inc. (back row), David Musgrave, Co-founder and Director, MTrec (back row), Chris Salkeld, MTrec (front row), Alex Simpson, Executive, RGCF (back row), Yuichi Kamata, Head of Corporate Planning, Trust Tech Inc. (front row)