TIDMHVN
RNS Number : 4322Q
Harvey Nash Group PLC
12 September 2017
12 September 2017
Harvey Nash Group PLC
("Harvey Nash" or the "Company")
Acquisition of Crimson Limited (the "Acquisition")
Harvey Nash, the global technology recruitment and outsourcing
group, is pleased to announce the acquisition of Crimson Limited
("Crimson"), cementing the Group's position as the market leading
technology talent provider in the UK's IT and digital sectors.
Crimson, founded in 2000, is a UK IT solutions and recruitment
company that specialises in digital and technology transformation
solutions as well as offering a full range of IT recruitment
services, both permanent and contract. For the year ended 31 March
2017, Crimson reported a profit before tax of GBP1.7 million on
turnover of GBP23.5 million, with gross assets of GBP5.4 million at
31 March 2017. During this period approximately 50% of Crimson's
gross profit was derived from IT Solutions and 50% from
recruitment, of which the majority was contracting or annuity
revenues.
Under the terms of the Acquisition, Harvey Nash Group plc will
acquire 100% of the shares in Crimson for an initial cash
consideration of GBP6 million ("Initial Consideration"), plus an
adjustment for working capital on completion (expected to result in
a payment of no more than GBP100,000). Deferred cash consideration
of up to GBP4 million ("Deferred Consideration") will be paid in
two equal tranches on the first and second anniversary of
completion with 50% guaranteed and the remainder subject to
achieving a minimum level of EBITDA in each year of GBP1.5 million
(or an aggregate over 2 years of GBP3 million or more).
In addition to the Initial Consideration and the Deferred
Consideration, an earn-out of up to GBP5 million will be payable in
cash over the period of three years following completion, in two
tranches:
-- up to GBP2 million will be paid based on the increase in
adjusted EBITDA delivered by Crimson during months 13-24 following
completion; the amount payable will be 5 times the difference
between such adjusted EBITDA and the adjusted EBITDA of GBP2.5
million for the year ended 31 March 2017; and
-- up to GBP3 million will be paid based on the increase in
adjusted EBITDA delivered by Crimson during months 25-36 following
completion; the amount payable will be 5 times the difference
between such adjusted EBITDA and GBP2.5 million (the "Earn-Out
Consideration").
The Initial Consideration, the Deferred Consideration and, if
applicable, the Earn-Out Consideration, will be satisfied from the
Group's existing cash flows resources and facilities. The total
maximum consideration payable for the acquisition of Crimson is up
to GBP15 million in cash, on a cash-free and debt-free basis, but
assuming a normal level of working capital (cGBP1.2 million during
the year ended 31 March 2017).
Of the three shareholder directors, Robert Mallaband and Simon
Chave will continue as CEO and CIO of Crimson respectively,
remaining with the business along with the current management team,
post-acquisition.
Albert Ellis, CEO of Harvey Nash Group, said:
"I am delighted to welcome the team from Crimson into the Group.
This is a transformative acquisition firmly establishing the
Group's business as the leading full service technology talent
provider in the UK's IT and digital sectors.
The breadth and depth of technology expertise and talent
resources offered by the combined businesses is unrivalled in the
market and we expect to achieve cross selling synergies over the
coming months. In particular, our world class Vietnam offshore IT
project and software development service will complement Crimson's
already established and well respected onshore consulting
teams.
The announcement demonstrates our commitment to executing our
stated strategy of delivering growth, both organically and through
acquisitions."
Rob Mallaband, CEO of Crimson, said:
"Harvey Nash is well established with a unique portfolio of
services and strong brand, and was the obvious choice when we were
seeking a strategic partner to support us as we accelerate our own
growth.
I am delighted that Crimson is now part of the Harvey Nash Group
and am confident that substantial success and opportunity lies
ahead now that we have the backing and support of a much larger
group with a global footprint."
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) no 596/2014.
For further information, please contact:
Harvey Nash Group plc
Albert Ellis, CEO
Mark Garratt, CFO
Tel: 020 7333 2635
Panmure Gordon (Nominated Adviser & Broker)
Ben Thorne
Erik Anderson
Andrew Potts
Tel: 020 7866 2500
Hudson Sandler
Michael Sandler
Hattie O'Reilly
Fern Duncan
Tel: 020 7796 4133
About Harvey Nash:
Harvey Nash is a global recruitment business focusing on
technology and digital talent recruitment. Our unique portfolio of
services, from executive search, professional recruitment to
offshore solutions, enables us to engage with clients at every
stage of the business cycle. Our relationship-based model underpins
the delivery of resilient financial returns and supports
sustainable returns to shareholders.
With 8,000 professionals in 47 offices across the USA, Europe,
Asia and Australia, Harvey Nash has the reach and resources of a
global organisation, while fostering a culture of innovation and
autonomy that empowers its employees and associates to deliver
client-centric solutions.
About Crimson:
Crimson is a fast-moving technology and recruitment company
which specialises in the full range of IT support, consultancy and
search and selection services. Specialising in digital and
transformational change services, Crimson is an accredited
Microsoft Gold Partner and the business operates the world's
leading and trusted technologies seeking to maximise its client's
return on technology investment to improve efficiency, compliance,
profitability, communications and processes. The business is driven
by people and its reputation is built on providing products and
services which reflects its values.
Crimson was majority owned by its directors and their wives
(Simon Chave, Helen Chave, Michael Ames, Barbara Ames, Robert
Mallaband, Julie Mallaband) and Tom Cadman, with the remainder of
the shares owned by senior employees and private individuals.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQMMGMLLMNGNZM
(END) Dow Jones Newswires
September 12, 2017 02:00 ET (06:00 GMT)
Harvey Nash Grp (LSE:HVN)
Historical Stock Chart
From Apr 2024 to May 2024
Harvey Nash Grp (LSE:HVN)
Historical Stock Chart
From May 2023 to May 2024