Pinnacle Staffing Group is selling its agency nursing and medical services business in order to concentrate on its doctor recruitment business.
Pinnacle is no longer in bid talks.
The businesses, which have been trading below budget, are being sold to the A24 Group for £2.75m. There have been problems since the new National Frameworks for Agency Nursing were launched in October 2009. There has been a modest overall reduction in NHS spending on agency nurses but in some regions the reduction has been much sharper. The businesses lost money on revenues of £15.9m in the first half of 2010.
Pinnacle intends to repay debts of £2.14m and collect money owed from customers of £4.95m. This should leave Pinnacle as a cash positive company.
Pinnacle believes the doctor recruitment sector is ripe for consolidation and it wants to make add-on acquisitions. It owns 75% stakes in two businesses in this area.
At 4p a share, Pinnacle is valued at £3.71m.
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