RemedyTemp Inc. (NASD: REMX) said today it will be acquired by privately held Select Personnel Services for about $169 million in cash. The price of $17 a share represents about a 39% premium over Remedy's closing stock price of $12.20 a share. The news sent Remedy's stock up $4.45 to $16.65 in late-morning trading.
The transaction, which has been approved by the board, is expected to be completed this fall. Select Personnel is based in Santa Barbara CA and has 50 offices nationwide. Sales are about $500 million. Select CEO Stephen Sorensen said the combination would create a $1 billion staffing company and "the clear industry leader in California." Remedy is based in Aliso Viejo CA. Both companies are large players in the commercial staffing segment but also do specialty staffing in areas such as accounting and finance.
Separately, Remedy reported its fiscal second quarter results. The company swung to a profit, posting $568,000 in net income, compared with a net loss in the fiscal 2005 quarter of $1.4 million. Revenue for the second quarter ended April 2 was slightly down to $124.6 million, off 0.5% from $125.3 million in the year-ago period. Gross margin rose to 21.7% from 19.8%, helped by a workers compensation accrual adjustment.
RemedyTemp Inc. (NASD: REMX)
For the second quarter ended April 2, 2006, compared with the same period in 2005
Revenue: $124.6 million, -0.5%
Net income: $568,000 vs. net loss of $1.4 million