CWS 3.0: March 28, 2012

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Acquisition: On Assignment Buys Large IT Staffing Provider

Among several recent acquisitions, On Assignment Inc. is buying Apex Systems Inc., one of the largest and fastest-growing suppliers of information technology staffing. Privately held Apex ranks No. 6 on Staffing Industry Analysts’ 2011 list of largest IT staffing firms. Apex has also qualified for the list of fastest-growing U.S. staffing firms every year since 2005.

“This acquisition continues to show how staffing companies seek to gain capacity and market share as the labor market turns,” said Bryan Peña, vice president, contingent workforce strategies and research, Staffing Industry Analysts. “Buyers need to make sure they structure contracts with ‘significant business event’ clauses that give them the ability to adjust contract terms or revisit other items when acquisitions or divestitures occur.”

On Assignment, based in Calabasas, Calif., ranks No. 30 on the 2011 list of largest IT staffing firms. It provides IT services through its Oxford Global Resources brand. On Assignment also provides healthcare, clinical and engineering staffing.

Richmond, Va.-based Apex will become a division of On Assignment and continue to operate as it has in the past. Apex was founded in 1995 and has 49 locations in the U.S. Its services included contract IT professionals, temp-to-perm and direct hire as well as recruitment process outsourcing (RPO), statement of work and specialty skill sourcing.

Apex’s average bill rate is $60 per hour, and it presently has approximately 16,500 workers at 1,200 clients. Apex receives about 60 percent of its revenue through vendor management systems (VMS). Oxford Global presently has approximately 1,400 temporary workers at clients. Oxford Global does not have revenue through a VMS.

The deal is expected to close in May and is subject to approval by On Assignment’s shareholders.

Other recently announced acquisitions include:

  • Kforce Inc. sold its clinical research division to inventive Health Inc. for $50 million. InVentiv, a provider of clinical services and staffing, has more than 13,000 employees in 40 countries. It is owned by inVentiv Group Holdings Inc., an organization affiliated with Thomas H. Lee Partners LP, a Boston-based private equity firm. Kforce reported in its 10-K filing with the U.S. Securities and Exchange Commission that the division’s largest customer, which provided 50.5 percent of its revenue in 2011, plans to move its business to other suppliers by December 2012.
  • Medical Staffing Network Healthcare LLC, the sixth-largest healthcare staffing company in the U.S., completed the sale this month of its MSN HomeCare division to Dallas-based Epic Health Services. The sale is part of MSN’s strategy to focus on its core competencies, including acute and non-acute healthcare organizations.
  • Ciber Inc. completed the sale of its federal division to CRGT Inc. for $40 million in cash. The division provides services primarily to the federal government with a large user being the Department of Defense, and the division’s services do include staffing. Greenwood Village, Colo.-based Ciber ranks No. 17 on Staffing Industry Analysts’ 2011 list of largest IT staffing firms. CRGT is a Reston, Va.-based provider of information technology services to the federal government. It is owned by private equity firm Veritas Capital.

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