HRnetGroup invests in joint venture to expand further in China

RECRUITMENT firm HRnetGroup on Thursday said that it plans to invest in a joint venture to boost its expansion into China.

It said that it has signed a binding term sheet with various individuals and the current shareholders of REForce (Shanghai) Human Resources Management Consulting Co Ltd and their affiliates to buy 51 per cent of REForce.

The purchase will be made in cash. The final price will be determined by the net profit of REForce for the fiscal years ended Dec 31, 2017, 2018 and 2019, as well as a "tiered price-earnings multiple".

The group will also extend a three million yuan (S$614,412) shareholders' loan to REForce for operation and expansion purposes.

If REForce does not meet the net profit target for two consecutive years, HRnetGroup can terminate the acquisition and require the REForce shareholders to buy out HRnetGroup from REForce, as according to the term sheet.