Harvey Nash Group PLC (LON:HVN), the global technology recruitment and outsourcing group, has today announced the acquisition of Belgian IT solutions company, eMenka NV, by its Belgian subsidiary, Harvey Nash NV. Based near Antwerp, eMenka focuses on placing Microsoft specialists in full-time employee and independent contractor roles.
The acquisition will enable the Group to take advantage of the strong software development market which is thriving across the world and particularly in Europe, where acute skills shortages in niche sectors drives demand and hiring activity. Businesses who specialise in IT skills and talent are reporting accelerating growth as the demand for these roles rises.
Under the terms of the Acquisition, Harvey Nash Group NV will acquire 100% of the shares in eMenka for an initial cash consideration of €1,000,000 (“Initial Consideration”). Deferred cash consideration of up to €1,000,000 (“Deferred Consideration”) will be paid on the third anniversary of completion subject to average EBIT performance over a three-year period starting on 1 February 2018 and ending in 31 January 2021 (the “Earn-Out Period”). The Initial Consideration and, if applicable, the Deferred Consideration, will be satisfied from the Group’s existing cash resources and facilities.
For the year ended 31 December 2017, eMenka reported gross profit of €0.82 million on turnover of €3.89 million and generated profit before tax of €0.21 million.
The acquisition is part of the Group’s strategy to grow its businesses in its core markets in Northern Europe. With more than 1500 technology consultants working at clients in Belgium, the Group continuous to strengthen its leading position in the Belgian IT market.
eMenka will collaborate with the Group’s existing offering in Antwerp to strengthen our leading market position in Belgium in this specific skills niche. There is little client overlap and market coverage will be extended creating revenue synergies.
Albert Ellis, Chief Executive Officer of Harvey Nash Group Plc, commented: “We welcome eMenka into the Group and look forward to working with the well-established and respected team. This business will enhance our position as one of the market leaders and fast growing IT solutions businesses in Belgium, creating a larger pool of Microsoft specialists and employees to fulfil growing client demand. We expect the combined businesses to be recognised as one of the leading players in this niche market which will attract further talent and opportunity into the Group.
As we stated in the preliminary results announcement on 27 April 2018, we are encouraged by the strong trading momentum at the beginning of the current financial year. This acquisition significantly strengthens our position in Northern Europe and will further bolster our confidence of delivering success in the year.”