Adcorp offers to buy Australian workforce firm
JSE-listed workforce management group, Adcorp has put in an offer to purchase 100% of Labour Solutions Australia, an workforce management firm dealing with agriculture, construction, mining, resources and transport sectors.
Adcorp said in a statement that the final purchase consideration would depend on the Australian company's earnings achieved during the 12 month trading period from July 1 2013 to June 30 2014.
The acquisition, if it goes through, will be settled with a combination of cash and shares. Sixty percent of the base purchase consideration will be paid to the vendors in cash, while the balance will be settled in Adcorp shares.
Adcorp chief executive Richard Pike said that the acquisition will significantly strengthen the Group's foothold in the Asia Pacific region where it already owns leading Australian IT recruitment and contracting business, Paxus, and has a stake in Indian IT service and solution business, Nihilent.
"Labour Solutions Australia is an attractive, highly cash generative business which will provide Adcorp with exposure to attractive industries in the Australian economy. The business has a dynamic, experienced and motivated management team and has a well-established national platform with a strong support network," said Pike.
The business was founded in 2004 by the current managing director, Andrew Northcott and currently operates in 36 locations across Australia.
"Joining the Adcorp Group is a hugely positive step in the evolution of the business for both the team and our valued clients.
I am excited about the future involvement of Adcorp and believe that it will provide greater opportunities for growth, the sharing of ideas and knowhow between the businesses and an ability to service mutual clients across a broad geographic spread as part of a bigger, international workforce management Group such as Adcorp," said Northcott.
The acquisition of Labour Solutions Australia will provide a number of financial and operational benefits and opportunities for Adcorp, the company said in its statement.
It believes that it will benefit from acquiring the business at a relatively early stage in its growth cycle, as well Labour Solutions being able to service the Adcorp Group's multinational blue collar client base across extended geographies and Austrialia in particular, with special focus on the areas of mining and resources
"Adcorp's philosophy with regard to acquiring businesses has always been to buy successful businesses and to create an environment conducive to perpetuating and building on this very success. This acquisition will be no different. As such, it is not our custom or intention to change the management style of the business. As such, Adcorp intends to continue offering employment to all of those employees currently working for Labour Solutions Australia," Pike said.
"It's the type of business that will integrate well with the Group's existing operations and I am extremely excited about the prospect of Labour Solutions Australia, its management team and staff joining the Adcorp Group," Pike said.