GO2 ACQUIRES LEADING EMPLOYMENT SERVICES PROVIDER, SKILL HIRE AUSTRALIA PTY LTD
7 April 2021: The GO2 People Ltd (ASX:GO2) ("GO2 " or "the Company") is pleased to advise that it has entered into a Share Purchase Agreement to acquire all of the shares in leading WA-based Employment Services provider Skill Hire Australia Pty Ltd (“Skill Hire”). The parties expect the transaction to be finalised following shareholder approval to the issue of the consideration shares pursuant to ASX Listing Rule 7.1 and satisfaction of the conditions precedent (which are summarised below), on 1 June 2021. The transaction aligns with the Company’s previously stated strategic plan to add high quality businesses to its portfolio under the GO2 umbrella, and its continued focus on earnings and cash flow to drive shareholder value.
Skill Hire Australia Pty Ltd
Skill Hire is one of Australia's leading Employment Services providers. It brings together the benefits of a Registered Training Organisation, an apprenticeship & traineeship recruitment business, and an employment agency to empower people towards gainful employment. Leveraging an excellent reputation and a strong presence across Western Australia and South Australia, Skill Hire delivers services to a loyal client base which includes a number of Australia’s leading companies. Skill Hire offers a wide range of training courses and qualifications that span a number of different industries, including pre-employment programs, apprenticeships and traineeships. Skill Hire delivers highly regarded Government funded training in addition to fee for service training, with revenue generated via both business-to-business and business-to-consumer models. Skill Hire also offers blue collar labour hire services to their clients.
Acquisition Benefits
The strategic acquisition of a highly synergistic business such as Skill Hire will provide a number of key benefits to the GO2 group that will drive shareholder value whilst providing a platform for future growth. The core business model of both businesses, being training and employment, is heavily geared towards the re-training and re-deployment of a national workforce impacted by the Covid-19 pandemic, and addressing significant skills shortages in the resources and building & construction sectors. The transaction is significantly earnings and cash flow accretive, with Skill Hire reporting unaudited revenue of $23 million and EBITDA of $1.6 million for the half year to 31 December 2020. Given the operational synergies between GO2 and Skill Hire the merged entity will see immediate cost rationalisation opportunities, which are expected to be in excess of $500k on an annualised basis.