Human Capital Roundtable dinner 16 November 2017
Welcome On behalf of sponsors PEM Corporate Finance and Gateley, welcome to the Human Capital Roundtable dinner at Gonville & Caius College. It’s an exciting time for the UK recruitment industry with growth forecast up to 7% in 2017 despite Brexit and a tightening labour market for some skills. We’d like to thank each of you for attending this event and bringing your expertise to our gathering. Enjoy the evening.
Lake Falconer PEM CF
Philip Olagunju PEM CF
Steven Raize Gateley
Natalie Georgiou Gateley
Speaker Mike Fell Partner, Key Capital Partners Mike is a chartered accountant with over 25 years’ experience of private equity investing, firstly with Bridgepoint and then with Baird Capital Partners. At Baird, Mike was the Regional Director responsible for the North of England before being appointed UK Managing Director, a position he held for almost 10 years. Mike has also held non-executive directorships for a number of public and private UK companies.
Guests Emily Aldrich
Patricia Kersey
Paul Bailey
Max McGillvray
Adam Bonner
Julian Nicholls
Toby Briant
Mark Pepper
Geoff Chapman
Sachin Ruparelia
Ketan Dattani
Ian Walters
Victoria Hancock
Clare Wight
Aldrich & Co
Bailey Fisher Executive Search Forces Recruitment Services Rutherford Briant Paranannies
Buckingham Futures Recruitment Investigo
Neaves & Neat Employment Services RedFox Executive Selection Whitehill Pelham Matrix SCM
Camino Partners
Pure Resourcing Solutions Clarity Appointments
Paul Hughes
Unique Employment Services
Menu Starter
Wines
Gnocchi and warm smoked salmon with balsamic glaze
Gonville & Caius White, Riddle Creek Chardonnay
Main
A great value Australian Chardonnay of exceptional quality.
Duck leg confit
Gonville & Caius Red, Riddle Creek Shiraz
with roasted plum and port jus, chatenay carrots, braised red cabbage and roasted garlic mashed potatoes
Dark berry flavours plus spice and pepper are generous on the palate of this red.
Sweet Sticky toffee and date pudding with caramel sauce and ice cream
Coffee and chocolate mints
Soft Drinks Sparkling Elderflower Still and sparkling mineral water
Tailored advice for your recruitment business Whether you are considering a sale of your business or have concerns about increased regulation, the structure and ownership of your business or day-to-day issues with employees or candidates, we can help you. We are able to support your organisation as we have a deep understanding of your requirements from a business standpoint as well as from a legal and regulatory one.
How we’ve helped our clients Examples of our team’s work in the recruitment sector include advising: ▪▪ The Pertemps Network group of companies on both their day to day legal work (litigation, employment, real estate, tax and share schemes) and a significant number of corporate transactions, including 30 acquisitions and disposals of recruitment and similar businesses, the spin-out and AIM flotation of Network Group, the £42m sale of Pertemps People Development Group and culminating in the merger of Pertemps and Network in 2012 and the £28m investment in the new group by LDC, creating a group with a turnover in excess of £450m. ▪▪ CBS Butler on the sale to Staffing 360 Solutions Inc. ▪▪ The founders of The Pathology Group (a leading medical recruiter) on the sale of the company to ICS Group
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Recruitment Investment Group on the sale to Cpl Resources Plc The founders of Team24 Limited (the specialist healthcare recruiter) on the sale of the company to The Capita Group Plc Acquisition of EuroStaff Group by Cordant Group plc Hamilton Bradshaw on the sale of Human Capital Investment Group to Graphite Hamilton Bradshaw (a PE Fund backed by James Caan of BBC’s Dragons’ Den) on the acquisition of Eden Brown Hamilton Bradshaw on the acquisition of DRC Locums Group Zeus Private Equity LLP on their investment in Air Energi Palatine and management on the secondary buy out of Air Energi Holdings Limited Palatine on the MBO of EPI Group
Our full service offering for recruitment businesses Employment and Pensions Our employment lawyers are known for their common sense approach, a commercial outlook and an in-depth understanding of the recruitment sector. We support clients with the full range of contentious and non-contentious employment law issues, including: drafting, reviewing and updating employment contracts, handbooks, policies and procedures; Agency Worker
Regulations; Issues in relation to confidential information and post-termination restrictive covenants; Reorganisations and redundancies; and much more.
Global Mobility Our Global Mobility specialists help organisations address a number of people aspects related to their international activities including employment risk assessments and due diligence reviews, international staffing
feasibility studies covering data protection issues, employment status issues associated with moving contractors, consultants and FDs in and out of the UK, how to manage the increasing regulations around cross border payroll obligations, tax legislation effecting the temporary labour market and the challenges of many different interpretations in foreign jurisdictions. We advise on travel and subsistence claims and managing those operating through umbrella or personal service companies in different international locations.
Tax Our tax partners regularly advise on setting up employee share option schemes and other employee incentives. We also advise on tax structures and IR35.
Banking and Finance Our Banking & Finance team works closely with our Corporate team to ensure that funding helps to deliver your deal rather than becoming an obstacle. We advise on and offer a full range of banking and finance services including acquisition finance, asset based lending and invoice discounting, banking and finance litigation.
Commercial We advise on supply and agency agreements, all types of commercial agreements including terms and conditions for the supply of services, RPO and outsourcing arrangements, franchise agreements, the Conduct Regs, joint venture and partnership agreements. We also advise on a wide variety of data protection issues (including the GDPR requirements).
Commercial Dispute Resolution The Commercial Dispute Resolution team has a wide range of experience in acting in the recruitment sector for a number of leading household names in the industry. We are specialists in successfully resolving all types of commercial disputes in the sector.
Corporate The Corporate team has over 80 lawyers offering strength in depth and extensive transactional experience. We advise on sales and acquisitions of recruitment agencies, mergers, MBOs and Private Equity transactions, shareholder agreements, listings, takeovers and provide general corporate governance advice.
To find out more, please contact: +44 (0) 121 234 0000
/company/gateley-plc
info@gateleyplc.com
gateleyplc.com
@GateleyPlc
Steven Raize
Partner, Corporate +44 (0) 207 653 1710 steven.raize@gateleyplc.com
A supportive relationship from the Cambridge corporate finance specialist PEM Corporate Finance is an award-winning corporate finance boutique based in Cambridge. Our team work closely with business owners on company disposal, acquisition, management buyout, succession, raising debt and equity finance, business valuation and corporate strategy. When business owners ask us for guidance, we take the time to develop a deep understanding of their company and goals. Then we make informed suggestions about how we can help. We are always open about what our services involve and how they will benefit our client.
company, PEM, the largest independent firm of Accountants and Business Advisers based in Cambridge. This guarantees us immediate access to the firm’s specialists, who give valuable input on the tax aspects of deals. Clients tell us they have confidence in our knowledge and resources. With over 50 years’ combined experience delivering transactions, we have a track record of helping clients prosper.
Philip Olagunju
Assistant Director, PEM Corporate Finance +44 (0) 1223 728247 philip@pemcf.com
We are based on the same site as our sister
PEM Corporate Finance: Recruitment sector outlook 2017/18 M&A Activity M&A activity in the UK recruitment sector has slowed down in 2017, with 31 deals closing year-to-date (November) involving UK and Irish target companies, compared with 55 deals completing at the same stage in 2016. This reflects continuing Brexit uncertainties and the slower pace of economic growth. Recruitment sector M&A should be resilient in 2018, with many UK recruitment businesses continuing to attract interest from both strategic and financial buyers:
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Private equity investors continue to have significant capital to deploy and remain interested in specialist companies in high growth sectors Quoted recruitment companies continue to benefit from the weak sterling with the majority exporting a larger proportion of their services to the US The established UK recruitment market will remain attractive to overseas buyers as a result of its stability and favourable regulatory requirements
UK deals Whilst deal activity has reduced as a whole in 2017, the fragmented UK recruitment market has seen further consolidation during the year with large corporates adding specialist providers to their portfolios: ▪▪ Serial acquirer Staffline Group Plc continued on the acquisition trail with the purchase of Driver & Labour Recruit Ltd, further strengthening their Northern Irish market presence, and the acquisition of Brightwork Ltd, an Edinburgh based blue-collar recruitment agency ▪▪ CPL Resources Plc continued to expand their recruitment capabilities with the purchase of RIG Medical Recruit and RIG Locums in an all cash deal worth £8.1m ▪▪ Harvey Nash Group Plc continued to implement its stated strategy of pursuing growth through bolt-on acquisitions The business acquired Crimson Ltd, a Birmingham based IT Recruitment Company. The initial cash payment was valued at £6m, plus £4m payable over a 2 year deferred period, plus a £5m earn out mechanism. ▪▪ There were also a number of MBOs carried out within the sector over the period, including the MBO of GCS Recruitment Holdings Ltd, a Reading based technology recruiter.
Global M&A Global deal activity is also expected to increase – 56% of companies responding to a recent survey carried out by EY intend to complete a least one acquisition over the next 12 months. Key decision makers within businesses clearly recognise the role acquisitions play in taking advantage of emerging trends and changes to boost long-term value and meet shareholder demands; demands that are unlikely to be satisfied by organic growth alone.
PEM Corporate Finance has experienced the UK’s global attractiveness as a deal target. We have completed a number of deals this year, many with an international dimension; these include the sale of Nitritex to Ansell, an Australian listed group, the sale of Pope Woodhead & Associates to Chicago-based Huron Consulting Group and the sale of Molecular Dimensions to Ohio-based Anatrace.
To find out more, please contact: +44 (0) 1223 728222
/company/pem-corporate-finance-llp
info@pemcf.com
pemcf.com
@pemcf