Connecting Excellence Group Plc (AQSE:XCE) (USOTC:XCELF) has completed its first acquisition, purchasing James Gray Recruitment and James Gray Engineering as part of its strategy to acquire specialist recruitment businesses.
The acquired businesses generated combined revenue of £1.79 million in the 12 months ended 30 June, representing an increase of 21.5%. Gross profit was £1.27 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) totalled £431,000.
James Gray specialises in construction and engineering recruitment, placing technical, management and leadership candidates in the UK, US and other international markets.
Connecting Excellence will pay £575,000 in upfront cash consideration. Approximately £425,000 of this was settled by offsetting amounts owed, resulting in a net cash outflow of approximately £150,000 at completion, excluding transaction costs.
Additional consideration is deferred and will depend on EBITDA generated during 2027, 2028 and 2029. No deferred payments will be made if performance is below a specified minimum threshold.
Connecting Excellence said it expects to retain between 75% and 85% of cumulative EBITDA generated during the earn-out period.
Bitcoin Holdings Increase to 81.157 Bitcoin
The acquired businesses also held 8.216 Bitcoin, valued at £531,223. Connecting Excellence funded the purchase of those holdings using proceeds from a £600,000 share subscription.
Following the transaction, the group’s total Bitcoin holdings increased to 81.157 Bitcoin, valued at £5.25 million.
Connecting Excellence, which holds Bitcoin as a long-term reserve asset, has also arranged a revolving credit facility with its Bitcoin custodian BitGo. The facility permits drawings of up to $1.5 million.
Chief executive Scott Ellam said the James Gray transaction is the first of a series of potential acquisitions in the company’s identified pipeline.
Ellam said, “The completion of our first acquisition is a significant milestone for XCE. It shows our model moving from strategy to execution, and James Gray Recruitment is exactly the type of business we are built for: profitable, specialist and founder-led, with a strong brand, established client relationships and significant room to grow.
“There are up to 1,000 owner-managed executive and specialist recruitment businesses in the UK, and around 10,000 worldwide. Many are profitable, with strong brands and committed owners, but no natural exit. Most are not suited to private equity, and trade buyers are rare. XCE is built for them. Owners and their teams keep their brand, their people and their independence, and gain a permanent home on a listed platform. We are not consolidating brands. The only thing we intend to consolidate is the value of these businesses, into one listed vehicle.
“This is the first of a series of potential acquisitions we have in our identified pipeline. Alongside continued organic growth across the Group, we see a significant opportunity to build a larger and more profitable recruitment group, while continuing to grow our Bitcoin treasury over the long term. We look forward to supporting the James Gray team in their next phase of growth.”
Richard Samuels, managing director of James Gray Recruitment, said, “We’ve built James Gray into a strong specialist business, and the focus now is on how much further we can take it. Joining XCE gives us greater firepower to invest in our team, expand into new markets and build on the opportunities we’re already seeing across the UK and US. We have ambitious plans for the business, and this gives us a bigger platform to deliver them.”
Leave a Reply