Brisbane based headhunter People Infrastructure is set to expand its reach in the IT sector with the acquisition of Melbourne-headquartered recruitment company Halcyon Knights.
People Infrastructure’s managing director, Declan Sherman, said in a release to the ASX the $13.5 million acquisition will complement the company’s existing Queensland-focused IT recruitment business, giving it a stronger foothold in the southern states, New Zealand and Singapore.
While People Infrastructure operates across four main sectors, including healthcare and IT, Halcyon Knights spans across all channels of IT including software development, cybersecurity, consulting and management, plus sales and marketing.
People Infrastructure has indicated Halcyon’s management will remain with the company to facilitate further growth, co-CEOs Lincoln Benbow and Marcus Lynch retaining their roles and joining People Infrastructure’s executive committee.
Funding for the acquisition comes from People Infrastructure’s existing cash reserves, plus a new debt facility that will take the company’s net debt to approximately $30.5 million.
The company’s stock price jumped more than five percent as the acquisition was announced Monday morning, with Halcyon Knights expected to add $3.9 million in EBITDA and $2.1 million in NPATA to People Infrastructure’s bottom line in FY2020.
Most of that cash will come from the Sydney and Melbourne markets, which Sherman said accounts for more than 85 percent of Halcyon Knights’ revenue.
“Halcyon Knights also has growing businesses in Singapore and New Zealand. Approximately 85 percent of the revenue generated by the business is from permanent placements and the other 15 percent of revenue is from IT contracting roles.
“People Infrastructure is especially attracted to Halcyon Knights’ strong leadership team both locally and internationally. It views this as important to the continued ongoing success of the business,” he said.