On Assignment Inc. (NYSE: ASGN) acquired physician staffing firm Whitaker Medical LLC for $17.1 million in cash and earn-out of $5 million. In addition, the company sold its allied healthcare staffing business to Cross Country Healthcare Inc. (NASD: CCRN) for $28.7 million.
Whitaker Medical is a Houston-based provider of physician staffing with offices in Houston; Atlanta; Austin, Texas; and Huntsville, Ala. Whitaker has estimated 2013 revenue of approximately $27 million. It will become part of On Assignment’s VISTA Staffing Solutions business.
Whitaker receives 30 percent of its revenue from the advanced practice area, On Assignment reported in a conference call with analysts.
In addition, On Assignment sold its allied healthcare division to Cross Country Healthcare. The allied business accounted for approximately 2.5 percent of the company’s consolidated revenue. The sale did not include On Assignment’s health information management practice, which will become part of its Oxford Healthcare IT group.
On Assignment will retain the allied health business' working capital of approximately $3.6 million.
“As we evaluated the allied healthcare staffing market, it became clear to us that it would be difficult to get this business unit, which is a tremendous asset and performs important and high-quality work, to the scale they need to be at On Assignment,” Dameris said in a press release. “We felt that Cross Country, which has a larger share of this market and deeper penetration into acute care facilities, can grow this business and allow it to flourish and would therefore be a better home for its employees and the unit.”
The allied business is expected to generate revenue of $41 million in 2013. It has 84 branch-based employees, and key managers will remain with the business, Cross Country reported.
“The acquisition of On Assignment's Allied Healthcare staffing division expands our local market presence and customer base, giving us the ability to leverage current and new client relationships, and it greatly expands our national footprint,” Cross Country President and CEO William Grubbs said in a press release. “This acquisition fits with our stated strategy and is a perfect complement to our existing lines of business, both from a geographic and staffing specialty perspective.”
Along with the Whitaker and Cross Country deal, On Assignment also announced it acquired information technology recruiting firm CyberCoders Holdings Inc. for $94 million in cash plus a possible earn-out of $11 million.
On Assignment is based in Calabasas, Calif.