On Assignment, Inc. announced it has signed a definitive agreement to acquire Apex Systems Inc., a leading information technology staffing and services firm.
The transaction will create one of the largest professional staffing firms and the second-largest IT staffing firm in the United States. The acquisition is expected to be significantly accretive to On Assignment’s earnings per share, on both a GAAP and cash EPS basis, in 2012 and beyond. On a pro forma basis, 2011 revenue of the combined entity was $1.3 billion.
Privately-held Apex Systems is the sixth-largest and one of the fastest growing IT staffing firms in the United States. In 2011, Apex Systems had approximately $700 million in revenue and adjusted EBITDA of approximately $65 million.
“Apex Systems becoming part of On Assignment further positions us in the most attractive and fastest-growing segments of the staffing industry,” said Peter T. Dameris, president and chief executive officer of On Assignment, Inc. “Apex Systems’ IT staffing services are complementary to those offered by our existing technology division, Oxford Global Resources. Because the offerings do not compete, the acquisition will create value for our clients, shareholders and employees by expanding our presence in the IT staffing market. The transaction also achieves On Assignment’s five-year strategic plan to reach $1 billion in annual revenue three years ahead of schedule.”
Apex Systems will continue to operate substantially as it has in the past. The company’s three co-founders will continue to focus on Apex Systems’ strategy and its high-performance culture as they have done for the last three years, and will also have representation on the On Assignment board of directors. Rand Blazer, Win Sheridan and Ted Hanson, Apex Systems’ chief operating officers and chief financial officer, respectively, and the rest of the senior management team will remain in place and continue to oversee the day-to-day operations of the business.
Under the terms of the definitive agreement, On Assignment will acquire all of Apex Systems’ equity and retire all of its debt, for a total of $600 million. The purchase price is comprised of $383 million in cash, and newly-issued stock valued at $217 million. The transaction is expected to close in May 2012.
For more information on the transaction, read a press release by clicking here.