AWF Madison buys Absolute IT for $15.3 million

AWF chief executive Simon Bennett.

AWF Madison Group, the country's largest contract labour company, has bought IT recruitment group Absolute IT for $15.3 million.

Absolute IT had revenue of about $65 million in the year to March 2016, AWF said. The purchase price comprises an initial payment of $11.1 million and an earnout of $4.2 million tied to Absolute IT's earnings in the year to November 2017.

It will be adjusted based on the aggregate net assets of the business at completion, and is debt-funded, requiring no shareholder approval.

The ICT recruitment market is expected to grow strongly, AWF chief executive Simon Bennett said, with the Ministry of Business, Innovation and Employment projecting jobs growth of 4.6 per cent a year until 2019 for ICT business and systems analysts and software developers, and 4.2 per cent a year from 2019 until 2024.

"Many organisations, both within the public and private sectors, are looking to update legacy systems and bring their organisations up to speed with the current climate," Bennett said.

"In the private sector in particular, digital capability and data driven business intelligence are increasingly essential for building sales and maintaining competitive edge."

Absolute will keep its directors and manager and will retain its brand while back-office functions are integrated with AWF's.

"AWF is experiencing strong demand, underpinned by the Auckland construction boom and high levels of activity in Wellington and Christchurch, and adding Absolute alongside the Madison brand will add significantly to our busy white-collar recruitment activity," Bennett said.

The shares last traded at $2.38, and have gained 3.5 per cent this year.