InterQuest, the (hopefully) recovering AIM-listed UK-focused IT recruitment firm, has stepped back into the acquisition market for the first time since its disastrous purchase of London-based recruitment agency Contract Connections Limited (CCL) in June 2011 (see Interquest weighed down by ‘Trojan Horse’ M&A).
InterQuest will pay up to £7m to acquire London-based ‘leading digital technology recruitment business’ ECOM through a combination of cash, shares and loan notes. ECOM recorded ‘adjusted’ EBIT of £850k in the year to 31st March 2013 which perhaps suggests that ‘real’ EBIT was somewhat less. It appears that InterQuest will have to increase its borrowings to pay the cash element as there was only £737k in the bank at half-time (30th June) and the firm was already carrying net debt of £5.7m. Let’s hope ECOM turns out a better bet than CCL.
InterQuest also confirmed ‘excellent’ trading in the UK though its fledgling business in Singapore is still in the doldrums.