Steve Scanlan sells remaining stake in Recon Group
Written on the 1 March 2019 by Ben Hall
Labor hire company People Infrastructure (ASX: PPE) has acquired the remaining outstanding shares in its existing IT businesses, Recon Solutions and Project Partners, for $2.8 million.
Recon Solutions is recognised as a market leader in IT recruitment in Queensland and Project Partners is a technology and consulting firm that assists its clients to successfully implement project-led transformation and change.
Steve Scanlan (pictured) is the former CEO and founder of Recon Solutions and co-founder of Recon Technology and was Brisbane's Young Entrepreneur of the Year in 2017.
In January 2018, Scanlan sold 50 per cent of the two businesses to People Infrastructure, one of Australia's leading listed workforce management companies.
"Both Recon Solutions and Project Partners have performed very well since we made our initial investment in January 2018 and during the past 12 months we have partially increased our stake in the Recon Group," People Infrastructure managing director Declan Sherman says.
"The decision to move to 100 percent ownership is based on the strength we continue to see in the business and the performance of the company over the past 12 months being ahead of expectations."
The current senior management team of Recon Solutions will continue in their current roles after the acquisition. Project Partners will also continue to be led by its CEO Chris Young.
People Infrastructure also announced that it has agreed to acquire Victorian Nurse Specialists, a leading Melbourne-based nursing agency specialising in supplying general, critical care, mental health, midwifery and aged care nurses to private and public healthcare clients across Victoria.
The acquisition price for Victorian Nurse Specialists is $2.5 million payable on a cash and debt free basis. The current senior management team will continue in their current roles post acquisition.
"The acquisition of VNS represents a logical expansion of our healthcare business. The acquisition of VNS will provide the ability to grow our healthcare offering in Victoria," Sherman says.
"There are a number of cross selling benefits in being able to provide nurses to our disability sector clients as well as leverage the combined workforce in the nursing and disability sectors to service the entire sector.
"The business will also benefit from sharing resources with our existing Sydney based nursing business. People Infrastructure and VNS are an excellent strategic fit."
The consideration for both acquisitions will be funded by new debt facilities that have been put in place. The acquisitions are expected to be EPS accretive in FY19. It is expected that the two acquisitions will contribute $1.1 million in incremental EBITDA over the next 12 months.
People Infrastructure operates across four main sectors including health and social care, information technology, specialist services and labour hire.
Business News Australia
Author: Ben Hall