HiTech transforms into a national recruitment powerhouse with the acquisition of Hudson
In its September 2026 investor presentation, HiTech Group Australia Limited (ASX: HIT) outlined the completed acquisition of select assets from Hudson Global Resources, a 40-year nationally recognised recruitment brand, through a voluntary administration process. The transaction triples HiTech’s revenue scale to a combined group revenue of approximately $216 million, with the upfront purchase price of $5.1 million representing an implied valuation multiple of under 1.0x last twelve months (LTM) EV/EBITDA as at 31 July 2026. Supporting the integration, HiTech has received firm commitments for a $4 million equity raising at $1.00 per share.
The presentation framed the acquisition as a counter-cyclical opportunity executed with financial discipline, capturing national scale, brand equity, and operating infrastructure at a price significantly below industry averages.
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Q&A: what is a recruitment asset acquisition through voluntary administration?
Voluntary administration is a formal insolvency process under Australian law, where an independent administrator is appointed to manage a company that is unable to meet its financial obligations. The administrator takes control of the business and works to achieve the best outcome for creditors, which may include selling assets.
In HiTech’s case, the acquisition is structured as an asset-only purchase. This means HiTech acquires the operating assets, customer relationships, and business capabilities of Hudson without assuming Hudson’s historical liabilities.
Administrators were appointed to Hudson on 22 April 2026 following an inability to reach agreement with the Australian Taxation Office (ATO) on outstanding taxation liabilities. Contributing factors included approximately $14.5 million in self-reported underpayment remediation costs relating to on-hire wages over the six years to 2020, approximately $4.4 million in restructuring and redundancy costs, and unrecovered funding of $4.4 million provided to Hudson’s Greater Chinese business. These liabilities remain with Hudson’s estate, not with HiTech.
The investor angle is straightforward: administration processes can produce entry prices that would not be available in a conventional sale. HiTech’s asset-only structure protects its balance sheet while securing the brand, revenue base, and scale of a business that previously traded above approximately $260 million in revenue (based on unaudited FY26 Hudson management accounts).
What HiTech acquired, and why the entry price matters
A 40-year brand at under 1.0x EBITDA
The presentation identified five value drivers underpinning the acquisition rationale:
- Transformational scale: Combined group revenue of approximately $216 million, representing over 3x HiTech’s standalone FY26 revenue of $65.6 million.
- National footprint: Hudson adds Melbourne, Brisbane, Adelaide, and Perth to HiTech’s single Sydney office, creating a five-city national delivery platform.
- Sector diversification: Expands HiTech’s capabilities beyond ICT contracting into professional recruitment, business support, projects, and permanent placement.
- Client base extension: Hudson’s state government and private sector relationships complement HiTech’s 85–90% federal government revenue concentration.
- EPS accretion: Expected to be EPS accretive on a pro forma basis prior to synergies.
Entry price discipline is a central theme of the presentation. HiTech paid $5.1 million upfront (with up to $3.9 million deferred) for a business with LTM revenue of approximately $220 million as at July 2026, a gross margin of 9.3%, and infrastructure described as capable of supporting over $300 million in revenue. An approximately $11.5 million cost reduction was achieved through targeted asset acquisition and renegotiations prior to day one.
Cost base optimised before day one
The presentation detailed a waterfall from Hudson’s FY26 operating cost base of approximately $26 million down to an acquired cost base of approximately $15 million, achieved through:
- Go-forward headcount reduction: approximately -$8 million
- Go-forward lease cost reduction: approximately -$1 million
- Go-forward supplier cost reduction: approximately -$3 million
Office consolidation included downsizing in Melbourne and Canberra, and lease negotiations in Sydney. The retained cost base focuses on senior leaders, revenue-generating consultants, and key delivery personnel. Core back-office systems have been retained as integration and scaling infrastructure, with platforms extended to the HiTech team.
Revenue recovery runway
Hudson’s annualised September 2026 revenue of approximately $150 million (based on anticipated final contractor novation figures) is presented in the investor update as the lower end of the anticipated revenue range, not a ceiling. The LTM July 2026 run rate of approximately $220 million represents a gap of approximately $70 million that management anticipated could be recovered as government novations complete and client activity normalises post-administration.
The presentation noted that the Hudson business has previously traded above approximately $260 million (based on unaudited FY26 management accounts), and that the recent performance decline was directly attributable to the disruption caused by the voluntary administration process. Revenue recovery is presented as a potential outcome as trading normalises, rather than a guaranteed result.
Funding structure and equity raising details
How the transaction was funded
| Sources | $m | Uses | $m |
|---|---|---|---|
| HiTech cash at completion | 7.7 | Upfront consideration | 5.1 |
| Term Loan | 10.0 | Refinancing Hudson existing facility | 8.1 |
| Equity Raising via Placement | 4.0 | Transaction costs | 2.0 |
| Working capital / balance sheet flexibility | 6.5 | ||
| Total | 21.7 | Total | 21.7 |
The $10 million term loan carries an all-in interest rate of 6.6%, amortising over a 4.5-year term. A $15 million receivables finance facility, available from 15 September 2026, provides 85% drawdown capacity against the receivables book at an all-in rate of 6.0%, funding the acquired receivables book and the group’s higher weekly contractor payroll obligations. Following the equity raise, the post-placement net debt position stands at $3.5 million.
Placement overview
- 4 million new fully paid ordinary shares issued at $1.00 per share
- 9.9% discount to the closing price of $1.11 on 11 September 2026
- 13.3% discount to the 5-day volume weighted average price (VWAP)
- New shares rank equally with existing shares on issue
- New shares do not participate in the FY26 final dividend of 4.0 cents per share fully franked (ex-dividend 8 September 2026, payable 22 September 2026)
- Settlement: 22 September 2026; Allotment: 23 September 2026
- Sole Lead Manager and Bookrunner: Blue Ocean Equities Pty Ltd
Post-placement, total shares on issue rise from 42.3 million to 46.3 million.
HiTech’s track record: the foundation behind the deal
HiTech was founded in 1993 and has been ASX-listed since April 2000. The company derives 85–90% of revenue from federal government clients and has maintained more than 10 consecutive years of profitability. As at 30 June 2026, HiTech held $10.6 million in cash with zero debt, and paid 8.5 cents of fully franked dividends in FY26 (4.5 cents interim, 4.0 cents final).
In FY26, revenue declined 3.1% to $65.6 million as federal government demand tightened, but operating cash flow rose 89% to $5.07 million, reflecting the company’s margin discipline over volume growth.
| Year | Revenue ($m) | NPAT ($m) | EPS (cents) | Dividends (cps, ff) |
|---|---|---|---|---|
| FY21 | 42.1 | 3.6 | 9.3 | 5.0 |
| FY22 | 63.0 | 4.4 | 10.7 | 6.0 |
| FY23 | 74.4 | 5.4 | 12.9 | 5.0 |
| FY24 | 63.6 | 6.0 | 14.3 | 5.0 |
| FY25 | 68.2 | 6.6 | 15.1 | 5.0 |
| FY26 | 65.6 | 4.1 | 9.7 | 8.5 |
The six-year track record illustrates a business that has maintained profitability and fully franked dividend payments across varying market conditions. Management described FY26’s margin preservation as intentional, with HiTech declining uneconomic contract renewals rather than prioritising revenue volume. The company enters FY27 with materially greater scale, having acquired a national platform at under 1.0x pro forma LTM EBITDA.
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