Acquisition and Placing
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN
OR INTO THE UNITED STATES, CANADA, AUSTRALIA, IRELAND OR JAPAN.
26 July 2007
HAT PIN PLC ('HAT PIN' OR THE 'COMPANY')
�6.9 MILLION ACQUISITION OF EXECUTIVE ACCESS INDIA, A LEADING
INDIAN SEARCH FIRM
PLACING OF 5,500,000 NEW HAT PIN ORDINARY SHARES AT 100
PENCE PER NEW ORDINARY SHARE
TRADING UPDATE - POSITIVE PERFORMANCE IN LINE WITH
EXPECTATIONS
Hat Pin, the human resources group operating through the
market-leading brands Akamai Financial Markets, Saxton Bampfylde
Hever and The Talent Business, today announces the acquisition of
Executive Access (India) Pte. Ltd. ("Executive Access India"), a
leading executive search firm in India, and updates the market on
first half trading and current prospects. Hat Pin will pay a maximum
consideration of �6.9 million in a mixture of cash and shares for
Executive Access India.
Executive Access India, which operates across the financial services,
technology, corporate, academia and not-for-profit sectors, has a
well-established, blue chip client base and operational diversity
that will fully complement existing Hat Pin businesses.
Transaction Highlights
* In line with Hat Pin's stated growth strategy;
* A leading Indian senior-level search firm;
* Accesses the exciting talent pool in the vibrant, burgeoning
Indian economy;
* Committed, ambitious and highly regarded management team;
* Delivers further diversification of the group's revenues;
* Placing of new Hat Pin shares to raise �5.5 million;
* Earnings enhancing in its first full year of ownership (see note
1).
Interim Group Trading Update
* Start of the year momentum maintained;
* Akamai Financial Markets successfully opened Japan office;
* Saxton Bampfylde Hever significantly increased its consultant
numbers with the appointment of the KPMG executive search team;
* Kendall Tarrant Worldwide re-branded as The Talent Business and
new operations established in Singapore;
* On track to meet expectations.
Commenting on the acquisition and trading update, Angela
Campbell-No�, Chief Executive of Hat Pin plc, said: "Executive
Access India is one of the pre-eminent executive search firms in
India with an outstanding track record. I am delighted that we are
able to extend our network into such a key, fast-growing marketplace
with one of the most talented and ambitious teams.
"Our existing businesses have maintained the momentum from the start
of the year, with strong forward order books and high levels of
activity, and the group remains on track to meet expectations for the
year."
For further information please contact:
Hat Pin plc +44 (0)20 7438 8600
Angela Campbell-No�, Chief Executive
Paul Billett, Finance Director
Arden Partners plc +44 (0)20 7398 1632
Richard Day/Steve Douglas
The Hogarth Partnership +44 (0)20 7357 9477
Julian Walker
NOTES TO EDITORS
Hat Pin plc (www.hatpin.co.uk)
Hat Pin primarily operates in the provision of human resource. The
group currently operates globally through its three subsidiary brands
- - the wholly-owned Akamai Financial Markets and The Talent Business,
and the 70%-owned Saxton Bampfylde Hever:
* Akamai Financial Markets (www.akamaifinancial.com) is a
specialist international executive search firm concentrating in
the financial services and financial markets arena, with leading
positions in London, Hong Kong, Singapore and Tokyo.
* Saxton Bampfylde Hever (www.saxbam.com) is a premium brand in the
executive search industry both in the private sector - where it
has an extensive track record in boardroom and senior management
appointments - and in the public and not-for-profit sectors - as
a leading adviser on senior appointments in higher education,
central government, charities and the arts.
* The Talent Business (www.thetalentbusiness.com) is the leading
global specialist in marketing communications talent. Formerly
known as Kendall Tarrant Worldwide, The Talent Business has
offices in London, New York, San Francisco, Hong Kong, Shanghai
and Singapore.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN
OR INTO THE UNITED STATES, CANADA, AUSTRALIA, IRELAND OR JAPAN.
26 July 2007
HAT PIN PLC ('HAT PIN' OR THE 'COMPANY')
�6.9 MILLION ACQUISITION OF EXECUTIVE ACCESS INDIA, A LEADING
INDIAN SEARCH FIRM
PLACING OF 5,500,000 NEW HAT PIN ORDINARY SHARES AT 100
PENCE PER NEW ORDINARY SHARE
TRADING UPDATE - POSITIVE PERFORMANCE IN LINE WITH
EXPECTATIONS
Introduction
Hat Pin, the human resources group operating through the
market-leading brands Akamai Financial Markets, Saxton Bampfylde
Hever and The Talent Business, today announces the acquisition of
Executive Access (India) Pte. Ltd. ("Executive Access India"), a
leading executive search firm in India, and updates the market on
first half trading and current prospects. Hat Pin will pay a maximum
consideration of �6.9 million in a mixture of cash and shares for
Executive Access India.
Of the consideration, �6.5 million is payable on completion, with an
additional �0.4 million payable on the basis of Executive Access
India's profitability over the period to 31 December 2008.
The consideration is payable in cash and shares and is being funded
in part by way of a placing of 5,500,000 new Ordinary Shares in Hat
Pin at 100 pence per share (the 'Placing') to raise �5.5 million
before expenses, with the balance of the consideration being funded
by the issue of new Ordinary Shares.
Executive Access India
Established in Mumbai in 1995, Executive Access India is a leading
search firm in India, which operates across the financial services,
technology, corporate, academia and not-for-profit sectors.
Executive Access India has a well established, blue chip client base
and operational diversity that will fully complement existing Hat Pin
businesses.
Executive Access India was specifically founded to access leadership
in India and, in its first year of operation, it placed the
highest-paid female executive in India.
Executive Access India completed its 100th search in India in 1998,
its 500th search in 2004 and, in the 2006/07 financial year the firm
placed 179 candidates and grew its existing client base by 62. To
date, Executive Access India has placed over 900 top-ranking
candidates in more than 150 corporations.
Since 2005, Executive Access India has had the largest team and
number of offices amongst search firms in India, with five offices
and 62 staff (27 consultants, 23 researchers and 12 support staff).
Having opened up its first office in Mumbai, Executive Access India
has strategically managed the expansion from its Delhi base (opened
in 2000), developing its geographic footprint with a roll-out plan
involving new offices in Bangalore (2000), Chennai (2004) and Pune
(2005).
In 1999 Executive Access India developed its proposition with the
creation of Career Access, a new division specifically designed to
service the needs of the middle management level of its existing
client base. In 2003, Executive Access India pioneered the concept
of a performance-linked clause to the search fee called Total
Accountability, which has become an industry benchmark.
For the year ended 31 March 2007, audited accounts of Executive
Access India showed a turnover of �3.2 million and a profit before
tax of �1.4 million. In the three years to 31 March 2007 Executive
Access India had a compound annual turnover growth rate of 62 per
cent. As at 31 March 2007 Executive Access India had net assets of
�1.9 million.
Not only does India offer a well-educated workforce but its more than
one billion strong inhabitants live in an economy expected to grow at
nine per cent per annum. The country also benefits from increasing
inward international investment and has a GDP of more than $4
trillion.
Acquisition Rationale
The acquisition of Executive Access India is expected to be earnings
enhancing in the first full year of ownership (see note 1).
As a market-leading operator in India, Executive Access India will
not only provide access to one of the most exciting talent pools
available in its own right, but the firm will also provide
complementary opportunities across Hat Pin's three existing brands.
Executive Access India's committed, ambitious and highly regarded
management team will continue to develop the business in their
existing roles, with Ranjan Marwah, Executive Access India's founder,
taking the title non-executive Chairman.
Additionally, the transaction:
* delivers on Hat Pin's stated strategy of supplementing the
Group's organic growth with targeted, market-leading quality
acquisitions;
* underlines the Company's position as an AIM-listed consolidator
within the recruitment industry;
* further diversification of the group's revenues, both on a sector
and a geographic basis;
* expands the geographic footprint of the group, providing greater
access to the vibrant burgeoning Indian economy;
* provides access to growing Indian businesses expanding
internationally;
* enhances group cash flows.
Through its Asian operations and the existing trading relationship
between Akamai and Executive Access India, Hat Pin recognises the
potential of the Indian market and is pleased to have identified a
well-established market-leading business of substance on the
Continent with such a committed and influential management team.
Principal terms and conditions of the Acquisition
Hat Pin has acquired 100 per cent of the issued share capital of
Executive Access India on a cash-free, debt-free basis for a maximum
consideration of �6.9 million. Of the consideration, �6.5 million is
payable on completion, with an additional �0.4 million payable on the
basis of Executive Access India's profitability over the period to 31
December 2008.
Under the terms of the acquisition agreement, �5.5 million will be
paid in cash, with the balance being satisfied by the issue of
955,600 new Ordinary Shares at 101.6 pence per share, being the
average mid-market closing price of a Hat Pin ordinary share in the
ten business days prior to 25 July 2007 (the 'Issue Price'). The new
Ordinary Shares will be the subject of an eighteen month lock-in
restriction.
The Placing
Pursuant to the Placing, which has been arranged by Arden Partners
plc ('Arden') as agents for the Company, 5,500,000 new Ordinary
Shares have been conditionally placed with institutional and other
investors at 100 pence per new Ordinary Share. The placing price of
100 pence per new Ordinary Share represents a discount of 1 per cent.
to the closing middle market price of 101 pence per Ordinary Share at
the close of business on 25 July 2007, being the last business day
prior to this announcement.
The new Ordinary Shares issued pursuant to the Placing represent
approximately 22.4 per cent. of the Company's existing issued share
capital and approximately 17.7 per cent. of the Company's issued
share capital immediately following the Placing and completion of the
Acquisition. The new Ordinary Shares will rank pari passu in all
respects with the existing Ordinary Shares. The Placing, which
utilises the authority given to the board at the last annual general
meeting to issue Ordinary Shares for cash, has been fully
underwritten by Arden and is conditional upon, inter alia, the
admission of the new Ordinary Shares to trading on AIM ('Admission').
Accordingly, application has been made to the London Stock Exchange
for the new Ordinary Shares to be admitted to trading on AIM. It is
expected that Admission will become effective and dealings in the new
Ordinary Shares will commence on AIM on the 1 August 2007. Completion
of the Acquisition will take place as soon as possible thereafter.
Directors' participation in the Placing
As part of the Placing, Terry Hitchcock (non-executive Chairman) has
subscribed for 100,000 new Ordinary Shares at 100 pence per share.
This subscription is being carried out on the same terms as the
Placing. Following this subscription, Terry Hitchcock will be
beneficially interested in 1,726,667 ordinary shares of 2.5 pence
each, representing 5.6 per cent. of the Company's enlarged issued
share capital.
In addition, Angela Campbell-No� has subscribed for 50,000 new
Ordinary Shares, Paul Billett has subscribed for 15,000 new Ordinary
Shares, Stephen Bampfylde has subscribed for 20,000 new Ordinary
Shares and Peter Walker has subscribed for 30,000 new Ordinary
Shares, all at 100 pence per share on the same terms as the placing.
Following this subscription, Angela Campbell-No� will be beneficially
interested in 182,623 ordinary shares of 2.5 pence each, representing
0.6 per cent. of the Company's enlarged issued share capital, Paul
Billett will be beneficially interested in 49,049 ordinary shares of
2.5 pence each, representing 0.2 per cent. of the Company's enlarged
issued share capital, Stephen Bampfylde will be beneficially
interested in 2,363,127 ordinary shares of 2.5 pence each,
representing 7.6 per cent. of the Company's enlarged issued share
capital, and Peter Walker will be beneficially interested in 260,000
ordinary shares of 2.5 pence each, representing 0.8 per cent. of the
Company's enlarged issued share capital.
Arden, which is authorised and regulated by the Financial Services
Authority and is a member of the London Stock Exchange, is acting
exclusively for Hat Pin in connection with the Placing and is not
acting for any other person other than Hat Pin and will not be
responsible to any person other than Hat Pin for providing the
protections afforded to its customers or for providing advice on the
transactions or arrangements referred to in this announcement.
Current Trading & Prospects
Akamai Financial Markets, Saxton Bampfylde Hever and The Talent
Business have maintained the momentum from the start of the year,
with positive forward order books and high levels of activity:
* New offices have been successfully opened in Japan (Akamai) and
Singapore (The Talent Business);
* Saxton Bampfylde Hever has significantly increased its consultant
numbers with the appointment of the KPMG executive search team;
* Kendall Tarrant Worldwide has significantly enhanced its New York
operation and was re-branded globally as The Talent Business last
month.
Additionally, the Board continues actively to pursue acquisition
opportunities that it believes will both complement the existing
business portfolio and further diversify group dependence on any one
business sector or geographic region.
Overall, the group remains on track to meet trading expectations for
the current year and will announce Interim results on Tuesday, 25
September 2007.
Note
1. Nothing in this announcement should be construed as a profit
forecast or be interpreted to mean that the future earnings per share
or profits of Hat Pin will necessarily be greater than the historic
published earnings per share.
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