In May 2006, Graphite Capital led the £27 million management buy-out of TMP Worldwide (“TMP”) from the company’s American parent, Monster Worldwide. At acquisition, TMP focused almost exclusively on recruitment advertising. As a result of the gradual shift from traditional newspaper to on-line advertisements, TMP’s revenues were in decline and the company was in need of a growth strategy. We identified an attractive opportunity to broaden the company’s service offering, drawing upon our considerable experience of investing in and developing recruitment companies.
Graphite placed early focus on analysing customer profitability, reducing working capital, improving cash management and strengthening the management team. As a result, the company’s earnings increased materially.
While TMP’s revenues were affected by the recession, decisive cost management allowed the company to maintain profit margins. With Graphite’s support, TMP used the recession to its advantage by acquiring an underperforming competitor on attractive terms and moving offices to a prime central London site. These actions increased TMP’s share of the public sector market and helped to attract the best creative talent. TMP also broadened its business model to include higher value-add recruitment services, reducing its reliance on advertising revenues.
This strategy provided a strong platform for growth. Since 2010, EBITDA has more than doubled. Through a series of refinancings, TMP has already provided Graphite with a strong return on its investment. The company is now the UK’s largest recruitment, employer brand and communications agency, offering clients a wide range of resourcing solutions, from employer branding to candidate management, assessment and recruitment process outsourcing.