Peoplebank Acquires Ambit to Become Australia’s Largest IT&T Recruiter

Peoplebank Australia Limited (ASX: PBA), has announced plans to acquire Ambit for $100 million, which will make it the largest IT&T recruitment company in the country.

The equity raising is expected to be ratified at an extraordinary meeting of Peoplebank shareholders in late January. The combined company will have revenues of circa $500m for FY2008 with an EBITDA of $24 million on a consolidated pro-forma basis.

It’s the latest in a series of acquisitions for Peoplebank, which purchased leading WA IT&T recruitment firm, Gryphon Consultants in May this year.

From early February, the combined company will have Leon Lau as Managing Director and Peter Acheson (CEO of Ambit) as Chief Operating Officer.  Peter will be responsible for all of the day to day operations of the business, including all sales, marketing, people and performance.  Marcus Emery (Peoplebank’s Director Recruitment Services) will head up the integration and implementation project.

Peoplebank Managing Director, Leon Lau, said this latest investment establishes Peoplebank as the clear leader in IT&T recruiting across Australia, while positioning the company for future growth.

“Peoplebank’s traditional strengths in the government sector are complemented and enhanced by Ambit’s dominance in the corporate market, with very little duplication across their client portfolios,” he said.  “The acquisition also offers enormous synergies in terms of geographical expansion, with Ambit enjoying a strong presence in the strategic Victorian market, where Peoplebank is relatively small.”

Mr Lau said the integration of the two firms will swell Peoplebank’s employee ranks from 100 to around 270 with significant operations in every state and a favourable balance of 1/3 government and 2/3 blue chip corporate business.

“With over 250 talented, passionate and experienced recruitment professionals working in a high performance, partnership focused culture, this union will create an unrivalled IT&T recruitment talent powerhouse.

“In a consolidating market, Peoplebank will be uniquely positioned with the broadest array of industry knowledge and experience, and the strongest geographical network to support our clients in acquiring the critical IT&T resources they need during this current skills shortage.

“Not only will Peoplebank be the dominant IT&T recruiter in every Australian region, but the strengthening of our human capital and infrastructure will allow us to diversify into other professional white collar sectors on the back of Ambit’s Engineering and Finance, Banking operations.” he said.

Peoplebank Secures Navis as Equity Partner

Peoplebank will fund the acquisition through an agreement with offshore private equity firm, Navis Capital Partners for a $50 million direct equity subscription and a firm underwriting commitment for a placement of $10 million in shares.

A further $60 million in “club” financing from Westpac Banking Corporation and Commonwealth Bank will cover senior acquisition debt, the replacement of existing facilities and anticipated working capital requirements going forward.

“This innovative capital structure gives Peoplebank rapid access to the funding we need to increase our size and scale while enabling us to benefit from Navis’ experienced leadership and proven operational knowledge through their provision of two new board directors.”

“Navis manages over US$2 billion in funds and has offices in Malaysia, Thailand, Hong Kong and India, which represents a huge benefit to our shareholders as we pursue our aggressive growth strategy.”

Proven Track Record in Integrating Acquisitions

“We already have successful experience in integrating a company twice our size after acquiring iGate in 2004.  Although Ambit is that much larger again, I’m confident that the lessons learned through the iGate integration will serve us well in making the most of this opportunity,” said Mr Lau.

Mr Acheson said “It has always been Ambit’s strategic view that scale is an important driver of success in recruitment and ultimately scale translates into greater opportunities for our people, our contractors and our clients.

Mr Lau added “There is enormous cultural synergy in this merger.  Both Peoplebank and Ambit have operated as relatively lean organisations and we are looking forward to applying our joint resources and manpower to invest more heavily in strategic business development initiatives that will equip the company to take advantage of future opportunities.”