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Select Staffing to buy Westaff

January 30 2009

Westaff Inc. (NASD: WSTF) announced Thursday it struck a deal to be acquired by Koosharem Corp., which does business as Select Staffing. The deal is expected to be complete by the end of March if all necessary approvals are received.

At least 51% of Westaff's shareholders must OK the deal, but DelStaff LLC, which holds 49.7% of Westaff's shares, has agreed to vote in favor of the plan. Select must also finalize financing from Bank of the West and other institutions for the acquisition.

Select will pay $1.25 per share in cash for all outstanding shares in Westaff except DelStaff's. It will acquire DelStaff's shares and $2.7 million in subordinated loans previously given to Westaff from DelStaff in exchange for first lien debt.

A previous announcement said the first lien debt would be valued at approximately $1.25 a share. With almost 16.7 million shares, the $1.25 a share would value Westaff at around $20.9 million.

Westaff, a Walnut Creek CA-based commercial staffing firm, was founded by W. Robert Stover in 1948. Stover sold his shares and stepped down as chairman in 2007. Buyers of the shares included staffing veteran Michael Willis and private investment firm H.I.G. Capital.

Westaff recently sold its businesses in the United Kingdom, Australia and New Zealand.

Select, based in Santa Barbara CA, has made several large acquisitions recently. It acquired Cincinnati-based staffing firm and professional employer organization Resolve Staffing Inc. in 2008. It also acquired industrial staffing firms Ablest Inc. of Tampa and Tandem Staffing of Boca Raton FL in 2007.

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