Impellam Group plc to acquire Bartech Holding Corporation
Impellam Group plc is pleased to announce that it has entered into an agreement to acquire Bartech Holding Corporation and its subsidiaries for an initial payment of $120m, which represents $88m(1) on a debt free cash free basis. Bartech Group is one of the leading global workforce management and staffing solutions providers with many customers who are part of Fortunes Global 500. Founded in 1977, Bartech is headquartered in Southfield, Michigan, USA and currently manages more than 30,000 workers and consultants and over $3 billion of spend for clients worldwide on a run rate basis through its Managed Services programmes (MSP) and Specialist Staffing business.
The initial payment of $120m will be satisfied in cash of $115.4m, to be drawn from the Company's new 4 year £250m Revolving Credit Facility, which was recently put in place with Barclays as lead bank and includes HSBC, RBS, Wells Fargo, Fifth Third and KBC. The remainder of the initial consideration of $4.6m will be satisfied through the issue of 401,866 new ordinary shares in the Company to the vendors of Bartech (which equates to an issue price of approximately 767.5p) (the "Consideration Shares"). The shares have a lock in period of between 1 to 3 years. Deferred consideration of up to a maximum of $6m is payable in cash to the vendors of Bartech no later than April 2018, dependent on performance.
Completion of the Acquisition is conditional upon drawdown of funds required to satisfy the consideration which is expected to occur tomorrow, 9th December 2015. The Impellam Directors believe that Bartech represents a highly attractive acquisition for the Company which further accelerates the delivery of Impellam's stated strategy:
- Bartech is culturally aligned to Impellam's vision "to be the world's most trusted staffing company" and has a strong management team which will complement Impellam's existing team
- Bartech will bring increased scale to Impellam's US business and will improve conversion of gross profit ("Net Fee Income") to EBIT
- Bartech already operates under Impellam's Managed Services and Specialist Staffing segmentation, which will accelerate integration whilst expanding managed services revenues
- Bartech's Managed Services business is complementary to that of Guidant which operates in both North America and the UK, and Guidant's leadership position in the UK will support Bartech's European growth
- The enlarged customer base will provide cross selling opportunities for Impellam's North American Specialist Staffing businesses, Corestaff, SRG Woolf and s.com, as well as for Bartech's professional and technical specialist staffing business
- The acquisition is expected to be materially earnings enhancing in its first full year of ownership and thereafter(2).
For the 12 months to 31 December 2015, Bartech is expected to achieve an adjusted EBITDA of $12.8m (2014: $9.6m) on Net Fee Income of $48m (2014: $43m) and turnover of $272m (2014: $226m). As at 30 September 2015, Bartech had net assets of $21.6m. The Net Fee Income for 2014 was $26.8m in respect of Managed Services and $16.1m in respect of Specialist Staffing. 2014 EBITDA, pre central costs of $8.5m, was $8.4m for Managed Services and $9.7m for Specialist Staffing.
Bartech's CEO, David Barfield, will join the Impellam Group, becoming CEO of Impellam's North American businesses including Bartech. Mike Bixler, Impellam's current North America Managing Director for Specialist Staffing, will become Managing Director for the enlarged Specialist Staffing business, reporting to David Barfield.
Application has been made for the Consideration Shares to be admitted to trading on AIM ("Admission") with Admission expected to become effective at 8.00 am on Friday 11th December 2015.
Julia Robertson, Chief Executive Officer of Impellam Group plc, commented:
"The acquisition of Bartech is another significant step forward for Impellam and will accelerate the achievement of our strategic goals. There is a strong cultural fit between our two businesses and the combined management team in North America has an exciting opportunity to create top line growth by achieving increased market share at strong margins and bottom line growth by consistently delivering operational improvements and synergy benefits. The combination of our leadership position in the UK MSP market and the highly respected Bartech and Guidant brands in North America will enable us to offer our MSP clients a global solution delivered by experts in our local markets.
I am pleased to welcome David Barfield to the Impellam Group and I look forward to working with him, and all his new management team, as our North American businesses deliver the next stage of their growth and development."
David Barfield, CEO of Bartech, commented:
"Bartech has a proud heritage of integrity and joining Impellam Group, a company that exemplifies the principles upon which my parents founded our firm, presents a wonderful opportunity for our loyal team members and candidates alike. Further, the collective strength of our staffing and managed services brands will deliver enhanced capabilities, breadth and scale to help us support our clients' growth objectives both in the USA and Europe. I look forward to working with Julia and leading the combined North American businesses."