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In a deal worth AUD60 million (€48.5 million), South Africa’s largest staffing firm, Adcorp (ADR:JNB), will acquire the entire issued share capital of Australian IT recruiter Paxus. The acquisition is expected to be completed by the end of January 2013.
The firm will fund the deal, paid in cash, by issuing 13 million fresh Adcorp shares which will be placed with South African financial institutions. Additionally, ZAR252 million (€22.4 million) in debt will be raised in the Australian debt markets.
Adcorp intends to take over all Paxus’ staff.
Founded in 1973 and bought by US-based IT firm Computer Sciences Corp in 1996, Paxus has current revenues of around €267 million (ZAR 3.0 billion). Headquartered in Melbourne, the company specialises in the niche IT recruitment and contracting market, and operates through seven offices in six States. Paxus is a well-known brand in the country and works with some of Australia's blue chip companies as well as various government departments.
In September last year, Adcorp bought South African IT contracting and recruitment business Paracon which operates in a comparable market to Paxus.
“The two businesses are extremely complimentary in that they deal in similar markets in the same niche skills set. As such, the opportunity for these two businesses to work together is significant,” said Adcorp CEO, Richard Pike.
“The seller of the business, CSC, is currently Paxus' largest client and will continue to procure IT resources from Paxus in terms of a five year supply agreement between the two companies. The acquisition offers a great opportunity for the Adcorp Group to expand its offerings in the IT contracting and recruitment space which continues to be a growth sector,” said Mr Pike.