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CBS Personnel's owner buying Staffmark

December 20 2007
Compass Diversified Holdings, owner of CBS Personnel Holdings, announced Wednesday it signed a deal to acquire Little Rock AR-based staffing firm Staffmark. Compass Diversified will invest approximately $80 million in cash to retire Staffmark's existing debt. Existing Staffmark shareholders will keep 29% of the diluted equity in the combined CBS-Staffmark business. The deal is expected to close in January 2008.

Staffmark operates 222 branches in 29 states with a majority of its revenue coming from light industrial staffing and the remainder from administrative and transportation staffing, perm placement, and managed solutions. It has estimated 2007 earnings before interest, taxes, depreciation, and amortization of approximately $18 million, according to Compass Diversified. Staffmark was formed in October 1996 and was a public company until June 2000.

CBS Personnel Holdings, a Cincinnati-based staffing company with 144 branches in 18 states, was ranked as the 23rd largest staffing company by Staffing Industry Analysts.

Fred Kohnke, president and CEO of CBS Personnel Holdings said the companies are complementary and the deal will give CBS critical mass in some markets and bring it into new markets. "We look at it as a great opportunity for us to expand our platform," Kohnke said.

In addition to building a larger staffing firm with the merger, Kohnke said it will also help the company weather an economic slowdown.

He said CBS' mix is presently 55% light industrial and 45% clerical administrative staffing and it also has the Venturi Staffing Partners brand. Kohnke said the company is doing a study to determine its next move as far as the brands and what to do with the Staffmark name. But, "for the foreseeable future we will continue to operate under those three brands," he said.

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