Red hot roll-up People Infrastructure to unveil new dealFeb 28...

Red hot roll-up People Infrastructure to unveil new deal

• Feb 28 2019 at 12:15 AM 

 Updated Feb 28 2019 at 12:15 AM  Sarah Thompson , Anthony Macdonald

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Meet the hot new roll-up in the world of listed small and micro-caps; contracted staffing and human resources services company People Infrastructure.

People Infrastructure has been busy snapping up stakes in similar businesses and, like all good roll-ups, they've told shareholders there is more to come.

And Street Talk understands investors shouldn't have to wait long for the next acquisition. People Infrastructure is understood to be close to putting pen to paper on its latest target; which is expected to open up a new market for the company. 

While it is not known exactly what People Infrastructure has set its sights on, it would make sense if it was targeting a new geography.  

The company's healthcare business is already the leading provider of nurses in the Sydney market - thanks to its acquisition of Network Nursing Agency last year - and it's known to be keen to replicate that footprint in other cities. Victoria is obviously the next biggest state, and snapping up an independent nursing agency there would make sense. 

The mooted deal is expected to be just another leg in People Infrastructure's high-growth pitch, which has unfolded before fund managers' eyes since the company's shares started trading on the ASX in 2017.

Back then, People Infrastructure came to market with a $64 million market capitalisation and having just recorded $192 million revenue and $10 million earnings in the 2017 financial year (on a proforma basis). Fast forward two years and analysts reckon $300 million annual revenue and $20 million EBITDA is not far off, thanks to the roll-up strategy. 

People Infrastructure's brokers - Morgans and Ord Minnett - seem to be getting some traction with their pitching. The company's shares are up 40 per cent in the first two months of this year, and another deal or two in the right sector would no doubt add fuel to the fire. 

Meanwhile, the company has also taken full control of a pair of IT sector recruiters and workplace management firms Recon Solutions and Project Partners. It bought into both companies last year and is understood to have taken the remaining 50 per cent in each. 

It's one small cap and microcap funds are keeping their eyes on. Perennial is already well set in the stock with a 10 per cent stake. The company's biggest shareholder is CEO Declan Sherman, a former private equity dealmaker, who owns 13 per cent of People Infrastructure's shares on issue.