Impellam swoops for Lorien in multi-million pound deal
SPECIALIST IT recruitment business Lorien, based in Leeds, has been acquired by Impellam in a multi-million pound deal to create the second largest staffing company in the UK by turnover.
Luton-based Impellam Group has bought Lorien for an initial consideration of £22.3m in cash and £7.5m in new ordinary shares at a price of 460p.
Impellam will assume Lorien’s net debt of £14m and pay an additional deferred consideration of up to £6m in January 2015 and up to £13.9m in January 2016, dependent on the EBITDA performance of Lorien during these two earn-out periods.
Lorien, based at West One on Wellington Street, was founded in 1977 and is the largest independent specialist IT recruitment business in the UK, and also has offices in London, Manchester and Edinburgh.
It operates under the Lorien Resourcing and Vertical IT brands, through which it provides outsourced recruitment services and specialist staffing expertise to more than 400 customers, including some of the UK’s largest blue chip financial, technology and pharmaceutical companies.
Impellam said the deal is consistent with its strategy of expanding its managed services revenues and adding new disciplines in specialist staffing and will provide access to the attractive growth dynamics of the IT staffing market.
For the 12 months to 31 January 2015, Lorien is expected to achieve an adjusted EBITDA of £8.7m (2014 audited, adjusted: £6.4m) on net fee income of £24m (2014 audited: £20m) and turnover of £330m (2014 audited: £295m).
As of September 30 2014, Lorien had net assets of £6.7m.
The cash consideration is to be satisfied by the company’s existing cash resources, and an equity placing with new and existing shareholders, as well as a new five-year loan of £15m with Barclays Bank.
Derek O’Neill, a major shareholder and director of Lorien, has been appointed to the Impellam Board as a non-executive director.
Julia Robertson, chief executive of Impellam Group, said: “The acquisition of Lorien is a significant step for Impellam and makes us the second largest staffing company in the UK. It has long been our ambition to develop a substantial presence in IT staffing and I am delighted that Lorien, as a market leader in UK technology staffing, is now part of the group.
“There are strong synergies between our businesses and an excellent cultural fit. Following our acquisition of Career Teachers in March, the addition of Lorien further broadens the scale and scope of the Group’s activities, increases our base of recurring revenues in an attractive high growth market and balances our portfolio. I am pleased to welcome Derek O’Neill to the Impellam board and I look forward to working with James Kelly, Lorien’s chief executive, and all his management team to take the business to its next stage of growth and development.”
Squire Patton Boggs acted for the shareholders of Lorien, with partner Jane Haxby leading the team.
