Welsh recruiter feels the Heat and acquires agency out of administration
Recruitment consultancy Heat Recruitment has been acquired in a pre-pack deal by Smart Solutions Group to give the Welsh business its first presence in the Manchester market and to expand into Bristol.
Administrators from Leonard Curtis accepted a proposal from a newly formed company owned by Welsh recruitment group Smart Solutions for £125,000 to be paid in two tranches. The quickly done deal will allow the business to trade under its existing brand name with its 10-strong team continuing to operate from its office at Arkwright House, Parsonage Gardens in Manchester city centre supplying permanent and contract staff.
Heat Recruitment, with operations in Bristol and Manchester, suffered during the pandemic and built up debts to HMRC of £900,000, which it could no longer service at a rate of £18,000 a month. The business was also struggling to repay a further £500,000 in debts, including a Coronavirus Business Interruption Loan Scheme (CBILS) with Funding Circle and lending for a fit out of the Bristol office with Aldermore Bank.
The business also owed £376,611 as part of an invoice discounting arrangement with Ultimate Finance. Heat made losses of £468,000 in 2022 despite a top line sales recovery to £8.4m after income dropped to £3.5m in 2020 and £5.6m in 2021.
According to the administrator’s report into the affairs of Team1664 Limited (formerly Heat Recruitment Limited – in administration) 51 members of staff transferred over to the employment of a new company formed by Smart Solutions and called Heat Recruitment Limited, formerly RJWVSUB01 LIMITED.
As a charge holder Ultimate Finance has been repaid in full from book debt collection, the administrator’s report claimed, but they are still seeking a repayment of £84,640 from the director’s loan account.
The buyer, Smart Solutions Group, was founded in 2007 and claims it is on course to make £120m of sales in the latest financial year. In 2022 it made pre-tax profits of £213,694.
Rob Webb, chief executive of Smart Solutions, said: “The acquisition of Heat Recruitment will be pivotal in delivering the doubling in growth the group is expecting in the next 12 months. A key component of this growth will be our offer to clients across the north and the Manchester foothold this deal gives us, is the perfect platform upon which to build.
“It will strengthen our position in the market and open new avenues of opportunity for both professional and personal development of the newly combined teams.”
On the deal, Heat Recruitment’s chief executive Steve Preston said: “The deal enables us to build on our existing capabilities and to foster a dynamic environment for innovation.”
In a LinkedIn post last week Preston said the business is also planning to open a new office in Birmingham.
The company has not responded to requests for further comment.
