On Assignment to Meet Growing Demand for
Professionals with Digital/Creative and IT Skills
Transaction Is Immediately Accretive to On
Assignment EPS
On Assignment, Inc. (NYSE: ASGN), a leading global provider of
diversified professional staffing solutions, today announced the
completion of its acquisition of privately held Creative Circle,
LLC for $570 million, and up to an additional $30 million based on
operating performance during 2015.
“With the addition of Creative Circle, On Assignment will be
able to provide a broader range of staffing services to our clients
as their business models and marketing demands focus on digital
solutions,” said Peter T. Dameris, On Assignment’s President and
Chief Executive Officer. “Consumers’ rapidly growing demand for
real-time information and services requires an increase in highly
skilled, talented professionals to support this digital platform.
The need for technical and creative services creates a great
opportunity for us to align Creative Circle with our On Assignment
divisions that specialize in IT to expand our service
offering.”
Under the terms of the purchase agreement, On Assignment
acquired all of Creative Circle’s equity for consideration of $570
million, plus additional consideration of up to $30 million if
certain performance targets for 2015 are achieved. The
consideration at closing was comprised of $540 million in cash and
$30 million of equity (794,700 shares of the Company’s common
stock). The acquisition is immediately accretive before any synergy
savings to On Assignment’s GAAP earnings per share and adjusted
earnings per share.
In connection with the acquisition, On Assignment entered into a
new $975 million credit facility. Proceeds from the new facility
were used to fund the cash portion of the purchase consideration
and repay borrowings under the existing credit facility. At
closing, approximately $875 million will be outstanding under the
facility. The new credit facility is comprised of an $825 million
seven-year term B loan, which bears interest at LIBOR (floor of 75
basis points) plus 3.0 percent and a $150 million five-year
revolving credit facility, which bears interest at LIBOR plus 2.5
percent. The term B loan was issued with an original issue discount
of 50 basis points. Wells Fargo Bank, National Association served
as the administrative agent for the credit facility.
In connection with the closing, On Assignment also granted
restricted stock unit awards to 55 Creative Circle employees
covering an aggregate of 143,070 On Assignment shares. Of these,
two executives were granted awards that will vest, subject to
continued service, (a) as to 40% of the award over three years
based on the achievement of performance targets for each of the
three years following the closing, and (b) as to 60% of the awards
in three equal installments on the first anniversary of the closing
date and upon January 1 of 2017 and 2018 if a 2015 performance
target is achieved. The awards granted to the other Creative Circle
employees will vest, subject to the employee’s continued service,
(a) as to 40% of the award over four years with 25% of each award
vesting on the first anniversary of the closing and the remaining
75% vesting in 12 substantially equal quarterly installments
thereafter, and (b) as to 60% of the award initially vesting in 12
substantially equal quarterly installments beginning on April 1,
2016 and on each quarterly anniversary thereafter if a 2015
performance target is achieved. The restricted stock unit awards
were granted to the Creative Circle employees as employment
inducement awards pursuant to New York Stock Exchange rules.
Creative Circle will become a division of On Assignment and
continue to operate under the Creative Circle brand name. The
current leadership team will continue to oversee the day-to-day
operations of the business.
Dameris added, “We look forward to working with the talented
team at Creative Circle to best serve our respective clients with a
complete digital staffing solution. Additionally, with Creative
Circle joining On Assignment, we move closer to achieving our $3
billion target in annual revenues by 2018.”
About Creative Circle
Founded in 2002, Creative Circle is one of the largest creative
staffing agencies in North America, providing digital, marketing,
advertising, and creative talent to a wide range of companies.
Creative Circle has developed a business model that enables it to
attract and place high-level talent on demand. The collaborative,
team-based approach between account executives and recruiters
includes a diligent screening process of all candidates to ensure
the right fit for each and every placement.
About On Assignment
On Assignment, Inc. is a leading global provider of in-demand,
skilled professionals in the growing technology, life sciences, and
creative sectors, where quality people are the key to success. The
Company goes beyond matching resumes with job descriptions to match
people they know into positions they understand for temporary,
contract-to-hire, and direct hire assignments. Clients recognize On
Assignment for its quality candidates, quick response, and
successful assignments. Professionals think of On Assignment as
career-building partners with the depth and breadth of experience
to help them reach their goals.
On Assignment, which is based in Calabasas, California, was
founded in 1985 and went public in 1992. The Company has a network
of branch offices throughout the United States, Canada, United
Kingdom, and Europe. To learn more, visit
http://www.onassignment.com.
Safe Harbor
Certain statements made in this news release are
“forward-looking statements” within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended, and involve a high
degree of risk and uncertainty. Forward-looking statements include
statements regarding the Company’s anticipated financial and
operating performance in 2015, and other statements regarding the
expected performance of On Assignment and of the combined company.
All statements in this release, other than those setting forth
strictly historical information, are forward-looking statements.
Forward-looking statements are not guarantees of future
performance, and actual results might differ materially. In
particular, the Company makes no assurances that the estimates of
revenues or earnings per share set forth above will be achieved.
Factors that could cause or contribute to such differences include
actual demand for our services, our ability to attract, train and
retain qualified staffing consultants, our ability to remain
competitive in obtaining and retaining clients, the availability of
qualified temporary professionals, management of our growth,
continued performance of our enterprise-wide information systems,
our ability to manage our potential or actual litigation matters,
the successful integration of our recently acquired subsidiaries,
the successful implementation of our five-year strategic plan, and
other risks detailed from time to time in our reports filed with
the Securities and Exchange Commission (“SEC”), including our
Annual Report on Form 10-K for the year ended December 31, 2014, as
filed with the SEC on March 2, 2015 and our Form 10-Q for the three
months ended March 31, 2015, as filed with the SEC on May 8, 2015.
We specifically disclaim any intention or duty to update any
forward-looking statements contained in this news release.
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version on businesswire.com: http://www.businesswire.com/news/home/20150605005996/en/
Media Inquiries:Muirfield PartnersMickey MandelbaumMaya
Pogoda310-785-0810orInvestor Inquiries:On Assignment, Inc.Ed
PierceChief Financial Officer818-878-7900
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