Recruitment firm Matchtech Group PLC (MTEC: AIM) announced its acquisition of the entire issued share capital of Application Services Limited, trading as Provanis, a niche technology recruitment business for a total cash consideration of £4 million.

Provanis is a technology recruitment business with niche expertise within the Oracle Applications marketplace, and a focus on low volume, high margin international contract recruitment. Based in London, its client base comprises predominantly large international blue chip organisations. The acquisition of Provanis will complement Matchtech's newly rebranded technology business, Connectus, and will broaden the Group's capability in the global ERP recruitment market.

In the year ending 31 March 2013, Provanis delivered an unaudited profit from operations of £1 million, with revenue of £14.5 million and net fee income of £2 million. Approximately 55% of net fee income was generated outside the UK. With contract margins of 14% and a net-fee-income to profit-from-operations conversion ratio of 48%. Provanis's financial performance is expected to be both cash generative and accretive to Matchtech's operating margin and earnings.

Under the terms of the acquisition, Matchtech will acquire 100% of Provanis for a total cash consideration of £4 million payable on completion of the acquisition. The Consideration is subject to a net assets adjustment such that, if the net assets of Provanis as at completion exceed £400,000, the consideration will be increased by £1 for every £1 of such excess, up to a maximum of £1 million.

Provanis was majority owned by its founder Mr Neale Provan, who no longer has an operational role in the business and who will leave following completion of the transaction to pursue other interests, Mr Provan has signed a non-compete agreement.

Commenting, Matchtech Group Chief Executive, Adrian Gunn, said: "The acquisition of Provanis is an important step forward in the growth strategy for the Group. We are excited by the opportunities it creates to broaden our capability within the global ERP recruitment market, to generate additional contract opportunities through cross-selling Provanis's expertise to Matchtech's wider client base, and to enhance Provanis's existing client relationships through the proven permanent recruitment capability of the Group.

"This transaction fits well with our stated acquisition criteria - namely small, bolt-on deals involving high margin contract recruitment businesses that complement our existing activities in specialist engineering, technology and professional services staffing," he added.

Matchtech Group is a specialist engineering, technology, professional staffing and employability & skills recruiter. In trading today, the company’s share price rose +0.96% to £4.20, an increase of +119.2% compared with a year ago. Based on its share price, the company has a current market value of £97.4 million.