30 November 2023

Hercules Site Services plc

("Hercules" or the "Company")

Acquisition of Future Build Recruitment

Hercules Site Services plc (AIM: HERC), a leading technology enabled labour supply company for the UK infrastructure sector, is pleased to announce that it has acquired 60% of Future Build Recruitment Ltd ("Future Build"), a specialist UK-based white-collar recruitment company operating in the UK construction sector, for a total consideration of £1,251,000 (the "Acquisition").

The transaction represents a significant milestone for the Company as the first acquisition in Hercules' history, which will see Future Build integrating into Hercules' Labour Supply division and providing the Company with exposure to the white-collar recruitment market.

Acquisition Highlights

·    The transaction will expand Hercules' exposure to the white-collar and permanent recruitment market within the construction industry, which consists of around 2.1 million workers or 6% of the total UK workforce.

·    Brighton-based Future Build provides the Company with an established presence in the Southeast of England, a region with good growth prospects for the infrastructure and construction sectors. Future Build focusses on permanent recruitment for main contractors, house building, high-end residential, social housing and specialist sub-contractor sectors. Future Build currently has 14 employees, with plans to expand the workforce to 16 in January 2024.

·    With minimal overlap between clients, the Acquisition will enhance the service offering to the Company's existing blue chip customer base, while Hercules' current offering will provide complementary services to Future Build clients.

·    Hercules' management team expects synergies of the Acquisition to include cross-selling across white and blue-collar recruitment, the sharing of digital recruitment tools and a stronger focus on permanent placement recruitment.

·    The consideration comprises £1,001,000 in cash and the issue of 994,431 shares (the "Consideration Shares") at a price of 25.14 pence per share, representing the 10 day volume weighted average price ending 28 November. The cash element is financed through the Company's existing cash resources.

·    The Consideration Shares are subject to a 12-month lock-in agreement followed by a 12-month orderly market agreement.

·    The vendors of Future Build (the "Vendors") can sell the remaining 40% minority interest in Future Build to Hercules, subject to the terms of the agreement outlined below (the "Partnership Agreement").

·    In the year ending 31 December 2022, Future Build generated revenues of £1,504,944 and produced profits before tax of £490,258. The assets subject to the Acquisition had a net asset value of £379,574.

·    The Acquisition will complete on the admission of the Consideration Shares to trading on AIM as described below.

Brusk Korkmaz, Chief Executive of Hercules, commented:

"The Acquisition of Future Build represents a major milestone for Hercules as we continue to deliver on our strategy. When we floated on AIM in February 2022, we stated our intentions to grow organically and through acquisitions which broaden our capabilities, accelerate growth and enhance our core offerings. Having tested the market opportunity in white-collar recruitment through organic growth initiatives, this deal expands our footprint in the white-collar recruitment market by bringing a highly regarded business and team into the Company.

"I believe that Future Build will prove to be an excellent addition to the Company and that this move will be beneficial to both Hercules' and Future Build's clients who will now be able to fulfil both white-collar and blue-collar recruitment opportunities through the same provider. It also means that the Future Build team will benefit from more exposure to the infrastructure market, which is expected to grow substantially over the next 15 years. I look forward to welcoming the management team and all Future Build employees to Hercules."

Simon Yates and Richard Smith, Future Build Directors, commented:

"We are delighted to be joining this ambitious company as it delivers its long-term growth strategy. By joining our two extensive client portfolios we will be able to provide both white-collar and blue-collar recruitment services, creating a significant platform for growth, exciting opportunities for our internal team and adding value to our combined customers and shareholders.

"We would like to thank all of our colleagues for their support throughout this process, and we look forward to working alongside Brusk and his team."

Partnership Agreement

Under the terms of the Partnership Agreement, the Vendors can sell their remaining 40% minority interest to Hercules, between the 5^th and 10^th anniversary of completion, at a consideration based on a multiple of 5.5x the average EBITDA achieved by Future Build in the two years preceding the minority interest sale. The consideration payable by Hercules for the remaining 40% interest can be satisfied in cash or shares in the Company, with a maximum of 68% settled in cash and capped at an aggregate cash payment of £1 million. Following the 10^th anniversary of completion, Hercules has the right to acquire any remaining minority interest held by the Vendors, based on the same calculation.

Application for Admission and Total Voting Rights

Application has been made for admission of the Consideration Shares to trading on AIM ("Admission"). It is expected that Admission will be on or around 1 December 2023. The Consideration Shares will rank pari passu in all respects with the Company's existing ordinary shares. Following Admission, the total number of ordinary shares in the Company in issue will be 63,422,415. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA's Disclosure and Transparency Rules.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which has been incorporated into UK law by the European Union (Withdrawal) Act 2018.

For further information and enquiries, please contact:

About Hercules Site Services PLC

Hercules is a leading tech enabled labour supply company for the UK infrastructure sector. Founded in 2008, Hercules has an established track record of profitability and fast-growth and has built a blue-chip customer base which includes Balfour Beatty, Costain, Kier, Skanska, Dyer & Butler and Volker Fitzpatrick. The Company has been appointed to provide labour for a range of high-profile infrastructure projects, such as HS2, due to its agile, innovative, digital first approach and complete service offering. It is well-placed to benefit from any government increase in infrastructure spending and its experienced management team has identified multiple opportunities for growth.

About Future Build Recruitment

Future Build Recruitment is one of the leading construction recruitment companies in the UK. The Company applies an ethical approach and a deep knowledge of the market to identify and recruit well-suited candidates for clients in the UK and overseas. Future Build's aim is to make a tangible difference to its clients while enhancing candidates' careers. As an REC accredited recruitment company, it is committed to upholding its standards of best practice and professionalism.