Alchemy boss to make £1.5m from Work Group float

A source close to the company said Work Group approached Alchemy Partners in 2000 when it was looking for backing from private-equity investors, but that Alchemy Partners had decided not to invest. Mr Moulton then took the unusual step of investing about £800,000 of his own money in the business.

Work Group hopes to raise £7m through a placing with institutional investors and venture-capital trusts. It expects to complete the flotation, which will value the company at about £20m, in March and has hired Altium Capital, the investment banking and securities trading boutique, to lead the sale. Steve Bodger, another director of Alchemy Partners, will join the board of Work Group as a non-executive director after the flotation. The source said the appointment of Mr Bodger was made without any influence from Mr Moulton.

Mr Bodger will be joined as a non-executive director by Keith Cameron, who is the head of human resources at the retailer Marks & Spencer.

The source said Mr Moulton had made his investment in the company shortly after the current directors Simon Howard, Michael Warren and Steve Halford, founded it in 2000. Work Group will use the proceeds of the sale to pay back debt and continue its acquisition policy. The company bought the rival executive recruitment company Armstrong Craven in October.

The three directors, along with the Glasgow-based private-equity firm Penta Capital, are expected to sell part of their stake in the business at the time of the flotation. Penta Capital invested in Work Group in January 2003. Financial details of its investment were not available yesterday.

Mr Moulton will not be selling any of his stake when the flotation occurs, although his ownership of the firm will be diluted from about 16 per cent to 11 per cent. Mr Moulton did not return calls yesterday.