Recruitment company Humanis Group has reached a deal to acquire ResCo Services for $13.4 million and has also announced plans to raise $15 million.
Recruitment company Humanis Group has reached a deal to acquire ResCo Services for $13.4 million and has also announced plans to raise $15 million.
Humanis is a specialist labour hire, professional placement and international recruitment business.
ResCo provides skilled labour, specialized mine site operation and maintenance services targeting the resource sector, with an emphasis on coal.
In a statement to the Australian Securities Exchange, Humanis said, "By bringing Humanis and ResCo together, it will create one of Australia's most diversified providers of staffing, maintenance and project services solutions, deploying more than 10,000 employees annually.
"The combined Group is anticipated to achieve pro forma revenue of approximately $300 million for the 2011 calendar year," the statement said.
As a condition precedent to the transaction Humanis will undertake a non-renounceable rights issue to raise the $15 million.
The rights issue will be on a 2.46-for-1 basis and will be priced at 1 cents per share.
Humanis said the company had received an underwriting commitment subject to certain conditions.
See company statement below:
International recruitment and labour hire specialists, Humanis Group Limited (ASX: HUM) is pleased to announce that it has entered into a binding Heads of Agreement (HOA) with ResCo Services Pty Ltd (ResCo) in which Humanis will acquire ResCo for $13.4 million through the issue of Humanis shares at $0.01 per share. A $15 million non-renounceable rights issue (to be underwritten) will also be offered to Humanis shareholders to allow them to subscribe for shares at $0.01 per share to appropriately capitalise the combined Humanis/ResCo Group.
Humanis is a leading specialist labour hire, professional placement and international recruitment business. ResCo provides skilled labour, specialised mine site operation and maintenance services targeting the resources sector, with an emphasis in coal.
By bringing Humanis and ResCo together, it will create one of Australia's most diversified providers of staffing, maintenance and project services solutions, deploying more than 10,000 employees annually. The combined Group will have an operational capacity spanning Australia, New Zealand and the Philippines, servicing a high-quality client base of principally ASX Top 200 companies. The Group will have significant exposure to key growth sectors in the market with a focus on the skills-and-labour constrained industries, including energy (coal and oil & gas), resources, transport, logistics and financial services.
The combined Group is anticipated to achieve pro forma revenue of approximately $300 million for the 2011 calendar year. That expected revenue growth does not account for the prospective growth opportunities resulting from the economies of scale to be achieved between the two groups, Humanis and ResCo and the significant cross-selling opportunities that exist. The revenue base of the Group will provide a strong and diversified platform from which the businesses will vigorously pursue those growth opportunities.
As part of the acquisition, Humanis/ResCo will also gain demonstrable industry experience with ResCo directors Craig Ransley and Andrew Poole both highly regarded in the industry and set to join the Humanis's board as non-executive directors. Mr Ransley was the key driver in the growth of the skilled labour and management services company, The TESA Group. Mr Poole was the Chief Financial Officer of Bradken from 1998-2005 and a major player in the transition of Bradken from a subsidiary of a major public company through private equity ownership to a successful IPO. In 2006, Mr Poole was a non-executive director of TESA and, along with Mr Ransley, heavily involved in the trade sale of TESA to Skilled Group Limited for $61.8 million that year. Amongst their directorships, Mr Ransley is Non-executive Chairman of Guildford Coal Limited and Mr Poole is a Non-executive Director of NuCoal Resources NL.
General Meeting
A General Meeting of shareholders has been scheduled for Thursday, 23 December 2010 to allow the Company to obtain the necessary shareholder approval as required by the Company's Constitution, the Corporations Act, the ASX Listing Rules and the ASX for a transaction to acquire ResCo. Details of the transaction are contained in the notice of General Meeting and explanatory statement which is expected to be dispatched to shareholders today.
Rights issue to raise $15 million
As a condition precedent to the transaction Humanis will undertake a non-renounceable rights issue to raise approximately $15 million before issue costs in conjunction with the ResCo acquisition to ensure that the combined Group is appropriately capitalised. The rights issue will be on a 2.46-for-1 basis and will also be priced at $0.01 per share.
It is Humanis' intention that the rights issue will be fully underwritten. Humanis has received an underwriting commitment subject to certain conditions and intends to finalise the underwriting agreement over the next week.
The non-renounceable rights issue and the issue of shares to ResCo shareholders will be undertaken via a prospectus to be issued by Humanis and lodged with ASIC next week.
In commenting on this major acquisition and company making event for the Humanis Group, CEO, George Gelavis said, "This merger will greatly enhance the overall prospects of the Group given ResCo's position as a highly respected and well positioned provider of services to the resources sector. Humanis Group expects to directly benefit from the continued increase in activity in this growth sector of the market through the merger."
"As a result of the earlier successful integration of the TSS and Westaff businesses, we have demonstrated the necessary expertise to ensure that considerable value enhancement occurs through a merger process, creating greater economies of scale and leverage across the combined Humanis branch network in Australia, New Zealand and the Philippines. A unique focus of this merger will be the potential to realise significant gains from the cross selling opportunities of our existing international and indigenous employment initiatives."
"The key to any merger is its people and we can say with great confidence that the team at ResCo is of the highest calibre and led by a highly talented and experienced board and management which will contribute enormously to continuation of building an exciting and jointly rewarding future for the Humanis Group."
Craig Ransley (Non-executive Director of ResCo) in commenting on the merger said, "With our high level of customer service focus there is no doubt that ResCo is well positioned to continue to accelerate its expansion plans in the resources sector. This merger further enhances our prospects by providing a broader branch network to access and the economies of scale benefit resulting from combining the overall operations. Humanis has already proven itself to be a very worthy and capable player in the international recruitment and labour hire area and has clearly demonstrated its ability to yield significant efficiency gains out of large scale mergers. We believe this merger will create considerable value for all shareholders."
"The merger of the two companies will have a significantly positive impact on ResCo's ability to source and supply staff to our client base, from both a local and international pool of candidates, supplied by the professional specialist labour hire, placement and international recruitment teams at Humanis," Mr Ransley concluded.
