Staffline Group PLC (AIM:STAF) launched a share buyback of up to £7.5 million as it sold its PeoplePlus subsidiary for a net £6.9 million to a UK arm of Australia's Swipejobs.
The AIM-listed company agreed a cash-free, debt-free price of £12 million, subject to a deduction of £5.1 million of advanced payments received in respect of future revenue.
From the £6.9 million net proceeds, there is a £2 million deferred consideration contingent on potential new contracts expected to start within the next 12 months.
Staffline said the cash proceeds would be used for a combination of share buy backs and funding for organic growth, with a separate announcement revealing the share buyback.
The buyback will be carried out in two tranches, with the first for up to 15,517,851 shares, and the second, which will be conditional on shareholder approval at the annual meeting in May, for up to 12,440,000 shares.
Chief executive Albert Ellis said the workplace training and employability business "played an important part in developing Staffline's service offering over a number of years but with our strategic ambitions centred on our fast growing recruitment activities as opposed to training and education, now feels like the opportune moment to implement this change."
He added: "Moving forward, we can have greater focus and cash resource for our market leading recruitment activities, which delivered outstanding results across 2024.
"We see significant opportunities for organic growth in our remaining recruitment divisions and will accelerate value creation for Staffline shareholders going forward."
Last year, PeoplePlus contributed roughly £65 million in revenues and generated a profit of around £1.3 million
Staffline overall made £1.06 billion of group revenue and operating profits of £11.1 million in 2024, ahead of market expectations a trading update earlier this month showed.