- Recruitment specialist People Infrastructure (PPE) has closed green on the ASX today after announced two major buyouts valued at over $30 million
- The company is buying a majority interest in Techforce Personnel, a casual staffing agency, and Vision Surveying, a surveying business, both in QLD
- Combined, the new businesses are expected to contribute $8.2 million in earnings before interest, tax, depreciation and amortisation (EBITDA) to People Infrastructure over the 2022 financial year
- People Infrastructure CEO Declan Sherman says the acquisitions are “highly complementary” to PPE’s existing businesses
- Both purchases will be funded by PPE’s existing cash reserves and debt facilities
- Shares in People Infrastructure closed 1.32 per cent higher today at $4.60 each
Recruitment specialist People Infrastructure (PPE) has closed green on the ASX today after announced two major buyouts valued at over $30 million.
The company is buying up a majority interest in Techforce Personnel and Vision Surveys, both based in Queensland.
Combined, the new businesses are expected to contribute $8.2 million in earnings before interest, tax, depreciation and amortisation (EBITDA) to People Infrastructure over the 2022 financial year.
Both purchases will be funded by PPE’s existing cash reserves and debt facilities.
The purchases
People Infrastructure will snap up 79.7 per cent go Techforce Personnel, with Techforce CEO Justin McNicol retaining his current holding of 20.7 per cent.
People Infrastructure said it values the purchase at $23.8 million, but based on an invoice financing facility held by the company, PPE will pay $13.4 million for its equity in Techforce.
This payment will be split into a mix of cash and scrip, with $13.1 million to be paid in cash and $250,000 to be paid in PPE shares.
People Infrastructure will then pay another $2.72 million in cash after the completion of some transition arrangements between the businesses.
Techforce provides casual staff to a range of industries across Western Australia and South Australia, though it has a large focus on the industrial services and mining sectors.
According to PPE, Techforce has grown its revenue at a compound annual growth rate (CAGR) of 23.7 per cent over the last three years.
People Infrastructure will also pay $6.7 million upfront for a 75 per cent interest in Vision Surveys, which PPE describes as a surveying business with a major focus on infrastructure projects, construction and residential development and buildings.
This payment will also be split, with 75 per cent of the $6.7 million to be paid in cash and 25 per cent scrip. People Infrastructure will then potentially pay an extra $3.8 million in three tranches based on Vision Surveys hitting some key EBITDA targets over the next three years.
Why the buys?
People Infrastructure CEO Declan Sherman said the acquisitions are “highly complementary” to PPE’s existing businesses.
“Both businesses are well established in their regions, have strong customer relationships, and proven leadership teams who have successfully grown these businesses over several years,” Declan said.
“Through being part of a larger group, these businesses will be able to accelerate their growth through adding service lines, sharing customers and growing geographically,” he said.
He added that People Infrastructure has a “proven track record” of completing acquisitions and accelerating growth in the acquired businesses.
Shares in People Infrastructure closed 1.32 per cent higher today at $4.60 each. The company has a $425.6 million market cap.