Hercules Site Services PLC (AIM:HERC) said it has acquired a majority stake of a specialist UK white-collar recruitment company operating in the UK construction sector for £1.25 million in cash and shares.
The purchase of 60% of Future Build Recruitment, which is based in Brighton and has an office in Croydon, adds both exposure to a segment of the construction sector that represents a reported 2.1 million workers and also presence in the southeast of England.
Hercules will pay £1 million in cash from its existing resources, plus 994,431 shares subject to a 12-month lock-in agreement and following that a 12-month orderly market agreement.
The vendors of Future Build, which generated pre-tax profit of £490,258 on £1.5 million of revenues last year, can sell the remaining 40% minority interest to Hercules after five years for 5.5 times earnings, and after 10 years, Hercules has the right to acquire the remainder on the same terms.
With 14 current employees, Future Build focusses on permanent recruitment for main contractors, housebuilding, high-end residential, social housing and specialist sub-contractors, and has minimal client overlap, Hercules said.
As such, it expects the deal to enhance its offering to existing blue-chip customers, as well as cross-selling with its own infrastructure market and blue-collar specialisms to Future Build clients, and also sharing of back office tools.
Hercules chief executive Brusk Korkmaz called the acquisition “a major milestone”, in line with the company’s IPO intentions and said the Future Build team will benefit from more exposure to the infrastructure market.
“Having tested the market opportunity in white-collar recruitment through organic growth initiatives, this deal expands our footprint in the white-collar recruitment market by bringing a highly regarded business and team into the company.”
Future Build directors Simon Yates and Richard Smith, who established the company, said in the statement: “By joining our two extensive client portfolios we will be able to provide both white-collar and blue-collar recruitment services, creating a significant platform for growth, exciting opportunities for our internal team and adding value to our combined customers and shareholders.”