Black-empowered ICT solutions provider Paracon has bought out a recruitment company for R29 million.
The organisation told shareholders yesterday that an agreement had been struck that will see it acquire all of the shares of The Personnel Concept with effect from the beginning of this month.
Paracon CEO Mark Jurgens says the takeover will augment Paracon Resourcing, the group`s core business, which contributes the most to its turnover.
Jurgens says the acquisition is a "win-win deal". He says Paracon has seen exponential growth in permanent placements over recent years and the takeover will boost the group`s service offering to existing clients in this area.
The Personnel Concept is a 24-year-old consultancy in SA, which focuses on recruitment in the finance, engineering and IT sectors. In a statement, Paracon said the acquisition would boost its service offerings.
"In addition, Paracon will leverage The Personnel Concept`s new markets and skills bases to access previously untapped opportunities within the existing Paracon client base. At the same time, Paracon`s recognised and excellent BEE credentials will enhance The Personnel Concept`s business opportunities within its existing client base."
Paracon is due to release annual results for the year to September 2006 in November. Jurgens says because of the date of conclusion of the acquisition, it will have no impact on these results.
"We are confident the benefits of the acquisition will be reflected in our results for 2007," he concludes. The company will pay the R29.285 million through a cash and shares split; 80% will be paid in cash, which will be funded by existing cash reserves. The balance will be paid in 3.76 million shares.
Paracon`s shares closed up on the announcement, ending Thursday at R1.75, compared to Wednesday`s close of R1.55. Its 12-month high is R1.82 and its 12-month low 93c.
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