SKILLED Group has substantially expanded its Western Australian presence through the $20 million purchase of local staffing services business Extraman. Extraman was formed 15 years ago and specialises in providing staff to the mining and engineering industries in WA, Queensland and the Northern Territory, which are at the sharp end of Australia’s current skills shortage. Skilled chief executive Greg Hargrave said the acquisition would significantly boost Skilled’s existing capabilities in mining and resources. It would add about $70 million to Skilled’s annual revenue and, as a result, the mining and resources sector would contribute about 20 per cent of Skilled’s total revenue, up from 15 per cent historically. Mr Hargrave denied that Skilled was buying Extraman at the top of the market. Economic surveys and industry feedback indicated strong demand for labour “through to the end of the decade and beyond”. “There are a lot of large mining projects in the pipeline driven by demand for resources from China and also India, which is expected to remain high for several more years,” he said. He added that Extraman would continue to operate as a stand-alone business with its own brand, and existing management would continue. The purchase price is 3.5 times Extraman’s average earnings before interest and tax (EBIT) in 2005, 2006 and 2007. Its EBIT in 2005 was $4.5m.