Tribal has sold part of its recruitment consulting business to competitor TMP for £1, it has been announced.
As part of the deal TMP takes the advertising and e-solutions parts of Tribal Resourcing for a notional amount but must pay the parent Tribal Group 20% revenue for three years up to a maximum of £6m.
Tribal Group will retain the executive search and reorganisation work within Tribal Resourcing and is set to work in partnership with TMP on “end-to end resourcing services”, according to Tribal Resourcing chief executive Julie Towers, left.
Tribal Group, which is currently in takeover talks with an unnamed bidder, announced that it wanted to sell support services including Tribal Resourcing and concentrate on its health, government and education business.
The decision followed results that showed a £45.6m pre-tax loss in 2009. In a statement on the sale of Tribal Resourcing, a spokesman for the group said the proceeds of the sale would be used to reduce its debt level.
Ms Towers said Tribal Resourcing had been “a hugely successful business and has earned its place as the public sector recruitment market leader. I am really proud of what we’ve achieved but this sale is rightly supportive of the change of strategic direction for Tribal Group announced last year.”
In the 2009 Tribal Group accounts, the resourcing business had gross assets of £15.8m and it made an operating profit, before goodwill impairment, of £301,000 on turnover of £62m.
Profits dropped last year, according to Tribal Group, who said unaudited accounts for 2010 showed an operating profit of £37,000 on a turnover £39m and gross assets of £10.8m.
TMP Worldwide chief executive Andrew Wilkinson said the acquisition was part of the company’s growth strategy.
“The recruitment markets have been challenging during the recession but as we emerge we are investing in our business,” he said. “This deal strengthens our resources and broadens our client base as we enter 2011.”