AGL - Accordant Group. was previously AWF Madison, Allied...

[Snoopy]

Tempering the outlook is the ghostly figure of former CEO Simon Bennett looking for complimentary business acquisitions. And that means 'cash out' from the balance sheet is an imminent threat. That could be why the market received what I thought was quite a positive result in a muted way. From HYR2023

"We have an appetite for acquisition as previously indicated. Whilst it has been complex identifying and progressing with suitable targets in the past couple of years, we have been assessing some interesting and attractive prospects. The opportunity for sustainable growth via acquisition therefore continues to appeal."

I take it the fact that no purchase has been announced is that Bennett is being very careful with his due diligence. Let's hope so!

I noticed the AGL share price trending down over the last few days, but was too busy to understand why. I got a shock when I saw the aforementioned 'Bennster Bomb' had struck!

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News Release 24 January 2023

Accordant Group to acquire prominent executive search firm Hobson Leavy

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About Hobson Leavy:
"Hobson Leavy is a retained executive search firm that was founded in 2006 by Carrie Hobson and Stephen Leavy. Hobson Leavy has enjoyed strong and consistent growth and today the business has 14 staff across offices in Auckland and Wellington. Hobson Leavy operates exclusively in the “C” suite: Board Directors, CEOs and Executive team members such as COO, CFO, CIO, CTO positions. With an extensive track record in both the public and private sectors, over the last 17 years Hobson Leavy has built a substantial network of clients and contacts at the most senior levels of New Zealand business and the public sector, successfully leading hundreds of executive searches and appointing some of the country’s most senior leaders at Board, CEO and Executive level."

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"The acquisition was funded from existing debt facilities and is expected to grow annual EBITDA in excess of $2m."

Over FY2020 (the last year mostly unaffected by Covid-19) EBITDA was $5.891m. So a forecast $2m EBITDA boost to that underlying figure is quite significant. Nevertheless we aren't told the purchase price, and so can't work out the ongoing interest burden that this acquisition incurs.

"Hobson Leavy’s strong identity and operational leadership will remain which is consistent with Accordant’s previous acquisition strategies. Founders Carrie Hobson and Stephen Leavy will continue to lead the business and are excited to continue delivering the same quality of service they are renowned for with the opportunity to utilise new access to the Group’s infrastructure, broader network, and additional offerings."

I am glad that Carrie and Stephen have agreed to stay with the business, and that they remain 'excited' at work. I guess this acquisition paves a way for the Hobson Leavy founders to eventually retire. But in the meantime their excitement is bound to go sky high on 31st January with that Accordant money for purchasing their business hitting their bank accounts!

SNOOPY