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25 January 2004
Scotland on Sunday
ASA secures loan to finance major expansion plans

ASA International, the recruitment agency, will make a series of acquisitions this year after securing a multi-million-pound loan facility from the Royal Bank of Scotland.

The Edinburgh company will use the cash, estimated at up to £5m, to secure its place as Scotlandís biggest independent job agency. It could also be used to expand into England for the first time.

Iain Moir, who led a management buyout of ASA last year, said the company had approached a number of possible acquisition targets and was looking in detail at two firms in Scotland and two in England.

He declined to name any of the agencies concerned, but they include independent consultancies similar to AEA in Edinburgh, Evolution in East Kilbride and Maxwell Bruce in Glasgow.

Graeme Manson, the corporate finance expert and former Rutherford Manson Dowds partner, has joined as a non-executive director to advise on takeovers. Moir said: "The knowledge [Manson] has of deal-making is the key thing to me."

ASAís move runs counter to the recent industry trend for consultants to leave large agencies and set up rivals.

Melville Craig, formerly Scotlandís biggest job agency, has spawned a number of smaller firms including E-scape in Livingston and Eden Scott in Edinburgh.

And Recruitment Scotland founders Paul Atkinson and Gordon Adam recently set up a specialist agency, Head Resourcing.

Moir said the planned acquisitions should allow ASA to expand into high-growth areas including healthcare, biotechnology and the public sector. 
 
ĎWe are looking for a turnover of £30m within three yearsí
 
 


He said: "Healthcare is attracting more investment now, and it is getting to the point where it needs more forecasting and planning."

Moir and his management team bought ASA from founder Ian Wittet in January 2003. Since then, turnover has grown from £13m to an estimated £15m for the year to March 2004.

He said: "We are looking for a turnover of £30m within three years. Around 50%-60% of it will be organic, with acquisitions making up the rest. If we donít find the right company, we will do it ourselves."

Moir said ASA had not been hit by the drop in demand for recruitment services in recent years. He said: "When the recruitment market is contracting, the competition tend to sit back. We take the opposite approach."

ASA poached building recruitment expert Ronnie Harris and seven staff from the rival Search recruitment agency last year. His appointment helped to boost turnover from the construction sector from £400,000 to £5m.

At the same time, ASA has withdrawn from providing Ďdata captureí services to financial services companies and utilities. Moir said: "Itís not that itís not a good area to be in, itís just that this is not our core market."

The company recently set up a new fee structure which means it will not take payments from clients until they are happy with the employees it has provided. Moir said: "Before this, we were a standard recruitment firm."

The company employs 82 people in Edinburgh, Glasgow, Aberdeen and Glenrothes. The employees it recruits receive an average salary of £40,000.

ASA was set up in 1970 to provide Scottish accountants overseas.

Wittet joined in 1975 and in 1988 became the sole shareholder. He is thought to have received around £8m when he sold the company.

Moir joined in 1990 as a consultant in the Aberdeen office and was appointed managing director before last yearís buyout.

DOUGLAS FRIEDLI



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