ASX-listed integrator, Data#3 (ASX: DTL) has purchased Sydney recruitment firm, Fingerprint Consulting Services, in a bid to extend its national reach and skill set.
The purchase price will depend on the company's performance over the next three years and be based on a 4-5 times multiple of its pre-tax earnings. It will be funded out of Data#3's cashflow and won't impact its current financial year figures. Fingerprint generated about $5 million annual turnover in 2007.
Data#3 CEO, John Grant, said four year-old Fingerprint provided geographic reach and expertise in recruitment solutions, and was a strong cultural fit.
"We've been growing organically in NSW for a number of years and it's been slow and not as rewarding as we'd hoped," Grant said. "We decided to look for a different way. In a tight market, you have to find another business that can give that significant step up, and that is why we've changed from organic to acquisitive growth."
All 10 Fingerprint staff will be retained, including its owners, Steve Grace and Darren McConnell. Grace has 12 years of experience in recruitment and originally harks from the UK; McConnell has 15 years' experience in HR management and ran his own consultancy firm from 1998-2004.
As part of the deal, Fingerprint's team will be merged with Data#3's NSW People Solutions business.
"We are a recruitment company with a solutions business that turned over $38 million nationally last year, and $21 million the first half of this financial year already," Grant said. "This acquisition made sense.
"They also have a HR consulting capability which we don't have."
Fingerprint's customers include AAPT, the Commonwealth Bank, News Limited, Fairfax and Sydney Water. Grant said there was little customer overlap.
"They will take on our customers and more actively pursue broader engagements with them and we will do the same with their customer base," he said. "The terms are good for both sides - our people get significant career and business opportunities, and Fingerprint becomes part of a bigger operation."
Grant said Data#3 will consider further acquisitions to boost its headcount and reach. In February, the integrator revealed that it had snatched up 40 ex-Commander staff as part of efforts to grow its business organically.