HiTech backs national expansion with $4 million Hudson funding

$4 Million Placement Supports Hudson Integration

HiTech Group Australia Limited (ASX:HIT) has secured firm commitments for a $4 million placement as it absorbs the Australian operations and selected assets of Hudson Global Resources. The raising will issue 4 million new shares at $1.00 each, taking HiTech’s shares on issue from 42.3 million to approximately 46.3 million and giving new investors a 9.9% discount to the company’s $1.11 closing price on 11 September.

The capital is less about plugging a disclosed earnings hole than funding the mechanics of a much larger workforce business. HiTech has completed the Hudson transaction using $7.7 million of cash at completion, a new $10 million term loan and the placement. A separate $15 million receivables finance facility is available to support the acquired receivables book and the enlarged group’s weekly contractor payroll.

National Scale Comes With Execution Risk

The acquisition gives HiTech a platform spanning NSW, the ACT, Queensland, South Australia and Western Australia, extending its established federal government exposure into state government, private-sector recruitment, professional services, business support and project work. Management puts combined pro forma revenue at approximately $216 million, more than three times HiTech’s standalone FY26 revenue of $65.6 million.

That headline scale is paired with a distressed starting point. Hudson entered voluntary administration after tax liabilities, weak labour-market conditions and substantial historical remediation costs weighed on the business. HiTech has bought selected assets rather than the company itself, paying $5.1 million upfront with up to $3.9 million deferred, which the presentation says limits exposure to Hudson’s historical liabilities.

The company says the acquired business had annualised September revenue of about $150 million after disruption from the administration, compared with roughly $220 million of last-twelve-month revenue to July. HiTech’s investment case therefore depends partly on restoring activity, while also extracting savings from office consolidation, duplicated overhead, supplier arrangements and systems integration. The presentation estimates an acquired cost reduction of approximately $11.5 million and says the assets were acquired at less than 1.0 times last-twelve-month EBITDA, based on unaudited Hudson management accounts.

Novations and Cash Flow Are the Immediate Test

HiTech says all transferring employees and contractors and all material enterprise clients have been novated, while most government panel agreements have also transferred. One government panel remains outstanding, and further government novations and supplier set-ups are expected to continue in the coming weeks. Until that work is complete, the final revenue base and the speed of cash collection remain less settled than the pro forma figures suggest.

The placement provides additional balance-sheet flexibility and could allow accelerated repayment of the term loan, but no specific repayment amount has been committed. HiTech’s own risk disclosure flags the pressure points: payroll must continue during the transition, receivables must move to new bank accounts, and systems from the acquired business must be integrated without interrupting contractor payments or client service. The new shares are expected to settle on 22 September and be allotted on 23 September 2026, with no entitlement to HiTech’s FY26 final dividend.