Large technology recruiters merge in $100 million deal

Stan Beer
Monday, 17 December 2007 13:09

IT People - Recruitment

Two of the largest technology recruitment firms in Australia have merged to form what will be the biggest technology recruitment network in the country.

ASX listed recruiter Peoplebank has acquired the largest privately owned IT&T recruitment firm Ambit for $100 million cash. The resulting firm will be significantly larger than the technology divisions of first tier rival recruitment firms such as Candle, Paxus, Hays, Hudson and others.

The funds for the acquisition are to be raised through an agreement with offshore private equity firm, Navis Capital Partners for a $50 million direct equity subscription and a firm underwriting commitment for a placement of $10 million in shares. A further $60 million in “club” financing from Westpac Banking Corporation and Commonwealth Bank will cover senior acquisition debt, the replacement of existing facilities and anticipated working capital requirements going forward.

According to a Peoplebank statement, the merged company will have more than 250 experienced recruitment professionals with Australia-wide coverage.

Financially, the new company will also be strong, with projected revenues of $500 million and an EBITDA of $24 million in the 2008 financial year.

Peoplebank managing director Leon Lau said: "In a consolidating market, Peoplebank will be uniquely positioned with the broadest array of industry knowledge and experience, and the strongest geographical network to support our clients in acquiring the critical IT&T resources they need during this current skills shortage.

“Not only will Peoplebank be the dominant IT&T recruiter in every Australian region, but the strengthening of our human capital and infrastructure will allow us to diversify into other professional white collar sectors on the back of Ambit’s Engineering and Finance, Banking operations.”