SEEK sells growing South American operations for $127.7m to reduce debt

SEEK says it has entered into a binding agreement to sell its 98.2 per cent interest in OCC Mexico and its 100 per cent interest in Catho Online (Brasil Online) to Spain-based Red Arbor Holding, which is among the biggest recruitment companies in Latin America.

Redarbor is paying US$85 million ($127.7 million) cash for the businesses, although US$20 million of this will be held in escrow as security against certain representations and warranties given by SEEK in connection with the transaction.

SEEK expects the deal to be settled by the end of June with the proceeds applied to reducing debt which stood at $1.1 billion at the end of December

However, the sale will lead to SEEK recording a net loss after tax of between $15 million and $35 million in its FY24 full-year accounts.

The loss will comprise the cash proceeds less carrying value, provisions for warranties, transaction costs and tax impacts.

OCC Mexico posted a 17 per cent increase in EBITDA in constant-currency terms as revenue grew through yield. At Brasil Online, revenue increased moderately, while costs fell by 17 per cent.

However, SEEK reported a group net profit after tax of $35.2 million in the first half of this financial year, down 74 per cent from $135 million a year earlier. The result came on the heels of a 5 per cent fall in revenue to $596.8 million.

The latest financial results of OCC Mexico and Brasil Online will be recorded in the FY24 full year results as discontinued operations.

SEEK says the sale will not affect its FY24 guidance.