Pertemps and AIM-listed Network Group Holdings are set to be reunited through a management buy-out of both businesses by a joint management team.
The deal will create Pertemps Network Group (PNG), the UK's largest independent provider of specialist outsourced recruitment services and temporary employment solutions.
The business will have a combined turnover of more than £425 million and the MBO will pave the way for further growth and acquisitions.
Network originally split from Pertemps in 1974 to form a separate group.
It forms part of an agreed succession plan that will see the founders of Pertemps and Network progressively step back from the day to day running of the business with the senior management team assuming greater responsibility.
The transaction is also a continuation of the transfer of ownership of the business from Tim Watts to PNG’s employees who will hold around 40 per cent of the group’s equity going forward.
Mr Watts and the founders of both Pertemps and Network will continue to hold a substantial equity investment in PNG.
As part of the deal, private equity provider LDC, part of the Lloyds Banking Group, will make a substantial investment alongside management and employees to support PNG’s growth strategy and provide funding for acquisitions.
Operating from its head office in Meriden, Pertemps was established by the Watts family in the 1960s.
It operates across a range of sectors with particular expertise in the industrial, engineering, logistics and commercial markets.
Network comprises a group of specialist recruitment businesses working within the IT, legal, financial and healthcare sectors together with its back-office process outsourcing subsidiary company, ESoS.
LDC was led by investment directors Steve Aston, Alistair Pendleton and Chris Hurley. Steve Aston and UK portfolio managing director Chris Hurley will join the board with immediate effect.
Martin Draper, LDC UK new business managing director said: “We are delighted to be investing in PNG alongside Tim and a high-quality management team and to support an excellent business which has such a strong growth platform.”
“The business has a market leading reputation in the provision of recruitment solutions and we are looking forward to working closely with the team to identify acquisition opportunities to deliver further growth.”
Mr Watts said: “This will be a new exciting period in the history of Pertemps, where we will be taking opportunities to grow by acquisition and organically, to make our company the foremost recruitment business in the UK.”
The transaction was completed with support of Eversheds who acted as legal adviser to LDC and Gateley who advised PNG’s management team. Mazars provided financial due diligence and the board was advised by Pinsents.