Hire Technologies Inc. (TSXV.HIRE.V) closed on its sales of The Headhunters Recruitment Inc. business back to the former owners of the operation.
“With this transaction, Hire takes a pragmatic approach to optimizing our business by divesting select assets of the Headhunters business unit,” Hire Technologies CEO Simon Dealy said. “This move enables Hire to reduce liabilities, including a significant C$4.7 million (US$3.4 million) contingent consideration, which ultimately strengthens our financial position.”
Hire Technologies first announced the sale last month. It had originally acquired Headhunters in 2020.
The rights to Headhunters’ trademark, domain name, email accounts and website will go to the acquirers. In addition, the acquirers — who are the same people who previously sold the company to Hire Technologies — are released from their noncompete agreements. The purchasers have offered to continue employment for all employees of the business. Hire Technologies also said the purchasers paid a nominal cash amount for the Headhunters business.
In addition, the parties entered into a mutual release agreement relating to the claims the original owners of The Headhunters had under the original share purchase agreement in September 2021, according to the company. Hire Technologies anticipates it will recognize a gain on the sale, which will be recorded in its fiscal second quarter along with an estimated reduction to current liabilities of C$4.7 million (US$3.4 million) in contingent consideration that was owed to the purchasers in connection with the original share purchase agreement. Hire Technologies also agreed to issue the purchasers an unsecured three-year term 8% promissory note with an estimated principal amount of approximately C$71,334 (US$52,337) in partial satisfaction for the mutual release of claims under the original share purchase agreement.