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Westaff Inc. (NASD: WSTF) said Monday it received an offer to be acquired by Koosharem Corp., the holding company of Select Staffing, and that it agreed to a period of exclusive negotiation.
Under the deal, Select would provide first lien debt for shares of Westaff owned by DelStaff LLC, valued at approximately $1.25 per share. DelStaff holds approximately 49.3% of Westaff's common stock. Select would also pay $1.25 cash per share for all other outstanding shares in Westaff.
With almost 16.7 million shares, the deal would value Westaff at around $20.9 million.
The Sorensen Trust, which owns Select's holding company, already holds 12.18% of Westaff shares, according to a filing with the U.S. Securities and Exchange Commission.
Select previously made offers to buy Westaff, and the two companies announced a confidentiality agreement on Oct. 9 to allow for transfer of information.
The new proposal is subject to conditions that include completion of due diligence. The exclusive negotiating period ends Jan. 14.
Westaff, a Walnut Creek CA-based commercial staffing firm, recently sold off its overseas operations. In March, it sold its United Kingdom business to Fortis Recruitment Group Ltd. for $6.8 million. Westaff also sold its Australian and New Zealand business this year to Humanis Blue Pty. Ltd. for $13 million in cash at closing plus another $2.5 million after one year.
Westaff was founded by W. Robert Stover in 1948, but Stover sold all 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, who operate as DelStaff LLC.
Select, based in Santa Barbara CA, has made several acquisitions as of late. Most recently, it acquired Cincinnati-based staffing firm and professional employer organization Resolve Staffing Inc. at the start of this year. Select also acquired industrial staffing firms Ablest Inc., of Tampa, and Tandem Staffing Solutions of Boca Raton FL in 2007. Select's RemX division acquired financial and accounting staffing firms Fortress Group Staffing and Princeton Staffing in 2007.