GO2 People (ASX:GO2), a provider of vertically integrated recruitment and building services throughout Australia and New Zealand, announced the acquisition of Perth-based recruitment company, Hunter Executive Search Consultants.

The deal is described as an earnings accretive acquisition, with 100% of acquisition consideration in the form of GO2 shares to the Vendors escrowed up to September 2022. The aggregate initial consideration will be equivalent to AUD 900,000.

Hunter is an Australian recruitment company specialising in permanent and contract placements for the executive, engineering, resources, environment and water industries. Founded in 2013 by Directors Ben Oakley and Gregor McNally, it has long-term relationships with many of Australia’s leading companies. Both Oakley and McNally work as principal consultants in the Hunter business and have over 15 years of experience within the recruitment industry.

GO2 People said both businesses are highly synergistic, and the acquisition represents significant cross-sell opportunities into the respective clients and key operating sectors which are expected to drive organic growth within the group.

“GO2 will continue to focus on blue collar labour hire whilst Hunter will complement this with the introduction of their white collar permanent and contract recruitment service which will see the company offer a full suite of recruitment services,” GO2 stated.

The company added that it expects Hunter to contribute revenues of circa AUD 3.3 million per annum with strong profit margins which will improve GO2 margins. To maximise this moving forward, GO2 will provide appropriate resources and back-office support to Hunter to assist with the scaling up of its business. In addition, the company will also benefit from a sharing of overhead costs with the Hunter business upon completion.

Oakley and McNally will join the GO2 executive team and maintain their roles as principal consultants within the Hunter business. They will, in conjunction with other GO2 executives, access synergies and manage the minimal integration required. There will be no immediate changes to the GO2 Board or Key Executive Team, albeit that GO2 intends appointing an additional independent non-executive director prior to 30 June 2021.

GO2 Managing Director Billy Ferreira said, “The acquisition of Hunter is highly complementary to our current recruitment business and falls within our strategic growth plan. Importantly, it remains within our core specialisation of recruitment and we look forward to accessing the synergies which will drive organic growth in the future. We’ve indicated our intent to grow the business whilst continuing to focus on cash generation and profitability above all else and, on the back of consolidation of the company in FY20, this is another step in the right direction.”

Pending shareholder approval, the date of the completion of the acquisition is 15 February 2021.