Newspaper publisher Trinity Mirror has agreed a deal to buy online recruitment services provider hotgroup for £50.5 million.
The recommended cash offer is 20.25 pence per hotgroup share and represents a premium of 30.2 per cent over the average closing price of 15.55 pence for the year to June 21, when the company announced it had received a preliminary expression of interest.
Trinity Mirror chief executive Sly Bailey said: "We see exciting opportunities for the management and continued development of hotgroup alongside our existing recruitment advertising businesses and the acquisition is consistent with our strategy of growing Trinity Mirror's core classified franchises both on- and off-line."
In a separate statement, hotgroup said the deal would "bring together one of the UK's leading recruitment groups and one the UK's largest media organisations to create a powerful new force in recruitment".
The company is led by Tony Reeves, formerly chief executive of the Delphi Group and co- founder of Office Angels.
Harvey Sinclair is managing director of the online business, Chris Herrmannsen, managing director of the recruitment consultancy business, and Steve Wright, chief financial officer.
Mr Reeves' sharestake will be worth £1.7 million, Mr Sinclair's is £612,000 while nonexecutive director Don Hanson will notch £2.3 million.
Hotgroup is a technologydriven recruitment company consisting of an online recruitment division and a traditional recruitment consultancy.
Mr Sinclair and Mr Herrmannsen will remain with hotgroup which will be run as a separate company within Trinity Mirror. Mr Reeves will remain as chairman while the company is integrated into Trinity Mirror, owner of the Birmingham Post.
"The acquisition of the hotgroup by Trinity Mirror is the culmination of years of building the company into a leading UK recruitment firm," said Mr Reeves. "The hotgroup will now benefit from the enhanced financial strength of Trinity Mirror, and employees from their drive and vision for bringing new technology and media solutions to the recruitment industry.
"I feel very proud of what everyone at the hotgroup has achieved together over the last few years and I am excited about what the hotgroup will offer in the future."
Since its launch in 1999, London-based hotgroup has made fourteen acquisitions including ten in the last 16 months, notably Workthing. com from the Guardian Media Group in September 2004, driving profits growth.
Online profitability was up over 80 per cent in the last six months of 2004 and group profits overall at the last set of interim results were up steeply to £2.728 million before goodwill amortisation, exceptional items, interest and taxation compared to a loss of £0.398 million in the year ended August 31, 2003.
Trinity Mirror said the deal continued its recent strategy of pursuing carefully selected acquisitions to deepen and strengthen its presence in key classified markets. " Furthermore, it will increase revenue diversification across recruitment services, online and print," it added.
Trinity Mirror recently acquired Smartnewhomes.com, the UK's leading website serving new home builders, and GAAPweb.com, the leading online recruitment site for financial jobs.