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Resources buys PR and restructuring firms

October 30 2009
Staffing Industry Analysts North American Daily News

Resources Connection Inc. (NASD: RECN) announced Thursday it is acquiring public relations firm Sitrick And Company Inc. and corporate restructuring advisory firm Brincko Associates Inc.

Resources said adding the firms will help give it an entrée into the corporate restructuring and advisory market assisting troubled companies. Resources said with its staffing resources and the acquisitions it will be able to help the firms at less cost than other players in the space.

Sitrick's specialties include "crisis" communication. Its clients over the past 20 years have included Delphi, Global Crossing and Worldcom. In addition, Sitrick has worked with 15 firms this year going through Chapter 11 cases and five firms going through out-of-court restructurings. The Wall Street Journal reported that Sitrick also represented Paris Hilton after her release from jail.

Brincko has managed a number of corporate restructurings including Barneys New York and Consolidated Freightways, according to Resources.

"Despite predictions that the recession is over, the business landscape remains littered with troubled companies and, indeed, whole industries," said Resources CEO Donald Murray. "The constricted financing environment over the past couple of years has further exacerbated these problems and deepened the pipeline of troubled companies. We believe this transaction provides significant opportunities for growth."

Resources will pay $43.3 million for the firms -- which includes $28.2 million in cash and approximately 810,000 shares of restricted stock -- plus an earn-out based on performance. The deal is set to close within the next 30 days.

Irvine CA-based Resources Connection provides finance/accounting, information technology and legal personnel through its Resources Global Professionals subsidiary.


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