GO2 People, a provider of vertically integrated recruitment and building services throughout Australia and New Zealand, today announced an agreement to acquire Western Australia-based Employment Services provider, Skill Hire Australia.

Skill Hire delivers a full suite of blue-collar employment services via its registered training organisation and its apprenticeship & traineeship recruitment and labour hire divisions.

The transaction is earnings and cash flow accretive, with Skill Hire reporting unaudited revenue of AUD 23 million (USD 17.54 million) and EBITDA of AUD 1.6 million (USD 1.22 million) for the half year to 31 December 2020.

The parties expect the transaction to be finalised following shareholder approval on 1 June 2021.

“The transaction aligns with the company’s previously stated strategic plan to add high quality businesses to its portfolio under the GO2 umbrella, and its continued focus on earnings and cash flow to drive shareholder value,” GO2 People stated.

According to GO2 People, the acquisition of Skill Hire will provide a number of key benefits to the GO2 group that will drive shareholder value whilst providing a platform for future growth.

“The core business model of both businesses, being training and employment, is heavily geared towards the re-training and re- deployment of a national workforce impacted by the Covid-19 pandemic, and addressing significant skills shortages in the resources and building & construction sectors,” GO2 People stated.

Skill Hire’s founders Robert Stockdale and Tony Fitzpatrick will join the Board of GO2, and the company also intends to recruit an additional non-executive director prior to the 2021 Annual General Meeting.

The company added that no capital raise is required or contemplated, with the issue of new shares to the Skill Hire vendors matching GO2’s current issued capital, and the cash consideration component to be paid from Skill Hire’s pre-acquisition cash balance.

The consideration will encompass a AUD 6.25 million (USD 4.76 million) cash completion payment and a deferred cash payment of AUD 3.25 (USD 2.47 million) million to current Skill Hire shareholders.

GO2 also announced that its CFO, Matthew Thomson, has tendered his resignation and will vacate the position in early May 2021, with Skill Hire’s Chief Financial Officer to become the GO2 Group Chief Financial Officer. All other key personnel of Skill Hire will continue to be employed in their current roles.

GO2 People Managing Director, Billy Ferreira said, “We are delighted to have reached an agreement to acquire Skill Hire. This is a merging of two very similar businesses, operationally, geographically and culturally. Skill Hire not only brings an extremely attractive business model which will enhance the GO2 group’s capability, but also brings significant earnings which will immediately drive shareholder value.

“Collectively, we’re excited about the future as a merged entity and the synergies that can be achieved within the next 12 months, including significant cross-sell potential, scalability and cost rationalisation - all of which will drive improved earnings, cash flow and further shareholder value,” Ferreira said.