AWF Shareholders Vote in Favour of Madison Acquisition

18 November 2013

AWF Shareholders Vote in Favour of Madison Acquisition

AWF Group shareholders today voted for the creation of a New Zealand recruitment leader approving the company’s $36 million acquisition of white collar labour hire business Madison Group.

The approval paves the way for AWF to complete the acquisition of Madison on 2 December 2013 to create a group generating revenues of approximately $200 million, almost 3 times the sales of any other recruitment company in New Zealand. Madison is forecast to lift AWF underlying after tax earnings1 from $5.4 million in the year to 31 March 2013 to approximately $8.0 million in 2015. Earnings per share are forecast to rise from 20cps in 2013 to 30cps in 2015.

1 Underlying earnings after tax excludes the amortisation of goodwill and impairment

AWF Chairman Ross Keenan said: “We are delighted shareholders have approved this acquisition. It will provide AWF with a major strategic presence within the white collar recruitment and contracting sector.”

AWF Chief Executive Mike Huddleston said: “We have been searching for the right opportunity to expand from the blue collar sector into white collar recruitment for some time as our clients have been telling us they wanted a one-stop-shop solution. Madison was the natural progression.

“Since we announced our intention to acquire Madison there has been a significant level of excitement among our clients and prospects about the opportunities the one-stop-shop will create. AWF and Madison have already been asked to jointly present to one of the country’s major businesses and we are looking forward to a bright future together.”

AWF will acquire Madison for a maximum purchase price of $36 million, comprising: $30 million to be paid at completion and an additional payment of up to $6 million which is payable subject to the earnings of Madison’s business for the 52 weeks following 4 November 2013 exceeding certain thresholds. Madison is currently on track to achieve these thresholds.

The acquisition will be funded by debt and will lift AWF’s borrowings to $30 million in the first year following the acquisition with the potential to lift to $36 million after November 2014, assuming Madison hits its target expectations.

About Madison Group (www.madisongroup.co.nz)

The Madison Group is a market leader in the recruitment sector with offices in the Auckland CBD, East Tamaki, Hamilton, Wellington and Christchurch. It was founded in 1998 and offers temporary, contract and permanent staffing solutions throughout New Zealand. In addition to its core business of permanent and temporary recruitment at all levels from contact centre and business support through to senior management, Madison’s services also include an executive contracting division, an IT recruitment division and a division focussed on providing labour hire solutions.

About AWF Group (www.awf.co.nz)

AWF Group (NZX: AWF) is New Zealand’s largest provider of temporary staff and one of the country’s largest employment facilitators. We are a public company listed on the New Zealand stock exchange, NZX. Each day we place an average of 3,000 trustworthy, reliable and committed workers into temporary employment through our network of 34 branches in 21 New Zealand towns and cities. We are also placing a growing number of workers into permanent employment. Having achieved a national presence, AWF Group’s strategy is now to penetrate deeper into the sectors we already service whilst also seeking new sectors for growth opportunities.

We operate three separate business units: AWF Labour, AWF Manufacturing and Logistics and AWF Trades together with Tradeforce Recruitment. We service employers across a broad range of industry sectors including: manufacturing and food processing; warehousing; transport; construction; civil and infrastructure maintenance and waste management. We pride ourselves on our ability to understand client staffing needs and to respond to those needs quickly and efficiently in line with the AWF Group motto: “Right People, Job Done”.

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