Sydney-based recruitment firm Chandler McLeod has expanded its operations in the Pilbara region by acquiring Karratha-based labour hire firm, Mangrove Personnel, for in excess of $2 million.
Chandler McLeod said the acquisition is expected to be earnings accretive from the outset, and is the first to be funded by the recent $12,000,000 capital raising undertaken by the Company to deepen its capabilities across its "House of Specialist Brands" business model.
Mangrove Personnel provides contract and permanent staff to companies in the buoyant Pilbara region of Western Australia, and has operated for approximately 5 years. With annualised sales of approximately $7 million, the business employs approximately 100 on-hired contractors, as well as three permanent staff.
The founder of the business, Mr Grant Cucel, will join Chandler Macleod, and continue to build the business, as a part of the acquisition.
CHD Managing Director, Stephen Cartwright, said the acquisition of Mangrove Personnel would give Chandler Macleod an even greater presence in the mining & resources sector in WA, and the new Karatha operation would compliment the Company's existing branch locations in Port Hedland, Kalgoorlie and Bunbury.
"This acquisition provides important geographic infill for our Ready Workforce brand in a booming part of the Australian economy.
"We are particularly pleased that Mangrove's founder and principal, Grant Cucel, will be staying on to drive continued growth in the Pilbara, and that he has demonstrated his long term commitment to CHD by electing to take a significant parcel of CHD shares as part of the purchase price.
There will be an initial payment on settlement of $2,000,000 (1), but the full acquisition price has not been disclosed as a substantial part of the consideration will be linked to the performance of Mangrove Personnel over the next 24 months. The transaction
will settle on 16 April 2007.
(1) Comprising $1,000,000 in cash and 974,705 CHD ordinary fully paid shares at $1.025951 per share. The issue does not require shareholder approval under Listing Rule 7.1 and shares are expected to be issued on 16 April 2007.
