Below is the press release issued the morning of 26/08/2004
by Public Recruitment Group Plc.
Public Recruitment Group
Acquisition of Action First Recruitment Consultants Limited Public Recruitment Group ("PRG"), the public sector recruitment and services group specialising in the education, healthcare and social work sectors, today announces its first entry into the London social work market with the acquisition of Modelbond Limited, the holding company of Action First Recruitment Consultants Limited ("Action First"), the London based supplier of social workers to public sector bodies across the South of England, for an initial consideration of £11.3 million. Action First will provide synergies with Academy Social Care, which supplies social workers predominantly to the northern market, and will further supplement PRG's presence, giving PRG a national presence and a top 5 position in the social worker recruitment market.
PRG's acquisition of Action First will be satisfied by the issue of 739,437 ordinary shares in PRG equivalent to £1,050,000 and the balance by a mixture of cash and bank guaranteed loan notes. Additional consideration may become payable subject to the achievement of EBIT targets for the years ended 31 October 2005 and 31 October 2006 respectively to be satisfied by a mixture of cash and loan notes and the allotment of ordinary shares in PRG. The maximum consideration payable is £16.5 million, based upon achieving £3m of EBIT for the year ended 31 October 2006.
Action First, which was established in 1984, operates from premises in central London and employs 24 staff. Each of the senior management team, lead by Jesel Ladva, has agreed to remain in his/her current position within the company. In the interests of facilitating a smooth change of control and to ensure that PRG realises the maximum potential from the goodwill acquired, Paul Godfrey, the managing director, has confirmed that he will continue to manage the business for a minimum period of one year.
For the year ended 31 October 2003, Action First had net assets of £0.95 million and achieved revenues of £14.5 million and operating profits of £0.13 million. As a result of identified cost reductions and directors fees, which will cease with immediate effect, the Directors believe that adjusted operating profit for the year ended 31 October 2003 would have been £1.4 million under PRG's ownership. Based on the Directors' assessment of Action First and the resulting synergies, the Directors believe the acquisition to be earnings enhancing in its first full year of ownership.
Commenting on the acquisition, Andrew Goodman, Chairman and Chief Executive, said:
"We are delighted to welcome Action First to the group. This is our third acquisition since our IPO in the spring, and it cements our position in the social work market as one of the top 5 providers in the UK. PRG now provides public sector professionals to three niche areas, education, healthcare and social care and is swiftly delivering on its clear strategy as outlined to investors at the time of the flotation and becoming a leading consolidator in the marketplace."