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Recruitment firm Impellam (IPEL: LSE) announced today its acquisition of the entire issued share capital of Career Teachers Ltd, a specialist education recruitment business that sources short- and long-term teaching staff from the UK and Internationally.
Impellam acquired Career Teachers for a total consideration of £22.3 million, comprising an initial cash consideration of £19.1 million, a deferred cash consideration of £1.5 million, and the issue by Impellam of £1.7 million in Loan Notes.
The acquisition, funded from existing bank facilities, is expected to be immediately earnings enhancing. The deferred cash consideration of £1.5 million is due in July 2014. The Loan Notes are redeemable in August 2017. In addition, a three year Long Term Incentive Plan has been put in place for the five key management shareholders.
For the year to 31 August 2014, Career Teachers is expected to record adjusted EBITDA of £3.6 million (2013: adjusted EBITDA £2.7 million) on expected revenues of £21.3 million (2013: £17.9 million). The latest audited accounts for Career Teachers reported profit after tax of £1.3 million for the year ended 31 August 2013 and net assets of £1.7 million as at that date.
Julia Robertson, Chief Executive Officer of Impellam, commented: "I am delighted that the management team who have been responsible for the growth and success of Career Teachers will be staying with the business and will take it on to the next stage of its growth and development within the Group. Career Teachers is a market leader in the provision of teachers in the London and Greater London market place and is an excellent fit into our Specialist Staffing portfolio.”
“Whilst Career Teachers complements our existing Celsian Education business, which is a leading regional player in the provision of teachers to schools and colleges, the personality and identity of the Career Teachers brand will be retained and the two businesses will continue to be managed separately. This acquisition will strengthen the Group's position as a market leader in the education market in the United Kingdom," she added.
Impellam operates primarily in the UK and the USA, with smaller operations in Australia, Ireland, New Zealand, and mainland Europe. According to research from Staffing Industry Analysts, the firm is ranked among the 20 largest staffing companies in the world.
In their most recent financial statement, the company reported a slight drop in revenue and gross profit, of -0.4% and -0.5%, respectively. The losses were primarily attributed to onerous contracts from one of the company’s non-core businesses.
Following the acquisition announcement, the company’s share price increased by +5.4% to £4.40, an increase of +16% compared with a year ago. Based on its current share price, the company has a market value of £190 million.