Recruitment Entrepreneurs Buy Back Direct Resources

Paul Atkinson and Gordon Adam, who sold the recruitment agency Direct Resources in 1999, have bought it back for an undisclosed sum from its parent company, iGate.

The pair will merge Direct Resources with their current recruitment consultancy, Head Resourcing, and the name Direct Resources will be dropped. The combined turnover of the new operation will be 6m annually.

ìWe were fortunate enough to sell Direct Resources in 1999 at the height of the market and the market is on the way up again, which makes it a good time to take it back again,î said Gordon Adam.

ìThe recruitment sector is experiencing an upturn, especially in IT where Direct Resources was focussed, and this purchase positions us perfectly to make the most of the improving market,î commented Guy Bendle, who leads the IT division of Head Resourcing.

More than 20 people worked at Direct Resources when it was sold in 1999, but this reduced to just five as iGate shifted its strategy away from recruitment. The principle gains for Head Resourcing are the existing contracts for the provision of IT contractors and the Direct Resources database.

In September 2003, Head Resourcing reported a turnover of 500,000 for its first full year but with the rapid growth in the temporary contract market this has jumped to an annualised turnover of 3m. ìAdding the Direct Resources contracts doubles our turnover and in the immediate future we will focus on cementing relationships with our new clients and contractors, recruiting another two or three staff to assist with this,î explained Sandy Bell, a director of Head Resourcing. ìBut we cannot rule out further acquisitions in the medium term.î

The sale of Direct Resources also makes good sense for iGate, the NASDAQ listed company with annual revenues of nearly US$300m.

Callum Lyle, Finance Director of Direct Resources, explained, ìiGate has recently gone through a strategic review and will now focus its attentions on its ìoutsourcingî activities in India. Head Resourcing is the perfect purchaser for Direct Resources as it is best placed to provide a seamless transfer of our customers, contractors and candidates.î

Head Resourcing is once again seeing a shortage in some IT disciplines, especially for contracting jobs. ìDuring the downturn many contractors took the security of permanent positions, which means companies looking for contractors now are finding them in short supply,î explained Bendle. ìWith the purchase of Direct Resources we have greatly added to the number of contractors on our database.î