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8-K - FORM 8-K - SPHERION CORP | g21993e8vk.htm |
Exhibit 99.1
Investor Contact:
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Randy Atkinson | |
(954) 308-7639 | ||
randalatkinson@spherion.com | ||
Media Contact:
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Lesly Cardec | |
(800) 422-3819 | ||
leslycardec@spherion.com |
SPHERION ANNOUNCES ACQUISITION OF CFO EXECUTIVE SERVICES FIRM TATUM
FORT LAUDERDALE, Fla., February 1, 2010 Spherion Corporation (NYSE: SFN) today announced the
acquisition of Tatum, LLC (Tatum), a leading executive services firm focused on the office of the
chief financial officer (CFO). Total consideration for the transaction is $46 million, comprised of
$11 million in Spherion stock and the remainder in cash and assumed liabilities.
Commenting on the Tatum acquisition, Spherion president and CEO Roy Krause noted, This acquisition
represents another step in the execution of our stated strategy of increasing our higher-margin
professional services business, while also expanding our presence in the C-level interim and
consulting market. Tatum is well-known for their deep expertise and focus on the CFO and will
complement our existing professional services business. As a result of this transaction,
professional services revenues account for approximately 44% of total revenue. We also see
significant opportunities for revenue growth through our combined relationships, while achieving
cost synergies through the reduction of duplicative back-office functionality. We welcome the
addition of Tatums senior management team to the Spherion family and look forward to their
contributions as we become a leader in the C-level interim and consulting marketplace.
Both companies bring unique strengths to this merger, said Rich DAmaro, chairman and chief
executive officer of Tatum. Tatum will be able to leverage its C-level management and consulting
service offerings across a much larger customer base and retain its partnership culture, while
relying on Spherions back-office infrastructure.
William Grubbs, Spherions executive vice president and chief operating officer, added, Tatums
focus on value-added services fits perfectly with Spherions commitment to delivering service
excellence. With average billing rates of $190 and approximately 650 professionals, including over
400 CFO-level partners, Tatum, in combination with Mergis, Technisource and SourceRight, enhances
our capability to provide seasoned CFOs and other highly skilled professionals to solve client
challenges.
SYNERGIES AND VALUATION
Tatums field operations will remain independent and its back-office operations will be consolidated into Spherions existing service center. The integration and consolidation are expected to be substantially completed by March 31, 2010.
Tatums field operations will remain independent and its back-office operations will be consolidated into Spherions existing service center. The integration and consolidation are expected to be substantially completed by March 31, 2010.
Once the integration and consolidation are completed, there should be approximately $6 million of
annualized cost savings. With this level of cost synergies, Spherion estimates that the purchase
price of $46 million is approximately 5.5x estimated 2009 pro forma earnings before interest,
taxes, depreciation and amortization (EBITDA) of Tatum. Assuming 2010 revenues about flat with 2009
($117
million) and realization of approximately 65% 75% of the $6 million cost synergies, Tatum should
be approximately $0.03 to $0.05 per share accretive to Spherion in 2010.
TRANSACTION DETAILS
Spherion will fund the transaction by utilizing its existing cash resources and revolving line of credit and by issuing approximately 1.8 million shares of Spherion common stock. Total borrowings after closing will be approximately $45 million with debt to capitalization of less than 15%.
Spherion will fund the transaction by utilizing its existing cash resources and revolving line of credit and by issuing approximately 1.8 million shares of Spherion common stock. Total borrowings after closing will be approximately $45 million with debt to capitalization of less than 15%.
Foros Securities LLC acted as exclusive financial advisor to Spherion.
INVITATION TO CONFERENCE CALL
Management will host its scheduled conference call February 4, 2010 at 9:00 a.m. Eastern time to discuss information contained in this release and to discuss fourth quarter 2009 operating results. Management will also discuss information that is currently posted in the Investor Relations section, Presentations page, of our website at www.Spherion.com. The presentation will be the basis during the conference call for managements discussion of the acquisition. The call may be accessed in one of the following ways:
Management will host its scheduled conference call February 4, 2010 at 9:00 a.m. Eastern time to discuss information contained in this release and to discuss fourth quarter 2009 operating results. Management will also discuss information that is currently posted in the Investor Relations section, Presentations page, of our website at www.Spherion.com. The presentation will be the basis during the conference call for managements discussion of the acquisition. The call may be accessed in one of the following ways:
Via the Telephone:
Please dial 1-(800) 230-1766
The conference call leader is Roy Krause
The pass code: Spherion Earnings Call
The pass code: Spherion Earnings Call
Via the Internet:
You may access the call via the Internet through the Companys Web site: www.spherion.com.
You may access the call via the Internet through the Companys Web site: www.spherion.com.
Replay:
A replay of the call will be available one hour after the live call has ended. You may listen to the replay of the call over the Internet through www.spherion.com.
A replay of the call will be available one hour after the live call has ended. You may listen to the replay of the call over the Internet through www.spherion.com.
ABOUT SPHERION
Spherion Corporation (NYSE:SFN) is a strategic workforce solutions company that provides
recruiting, staffing, consulting and outsourcing specialties to meet the evolving needs of
companies and job candidates. As an industry pioneer for more than 60 years, Spherion has sourced,
screened and placed millions of individuals in temporary, temp-to-hire and full-time jobs.
With approximately 575 locations in the United States and Canada, Spherion delivers strategic
workforce solutions that improve business performance. Spherion provides its services to
approximately 8,000 customers, from Fortune 500 companies to a wide range of small and mid-size
organizations. Employing more than 160,000 people annually through its network, Spherion is one of
North Americas largest employers, providing general staffing, technology services, professional
services and outsourcing. To learn more, visit www.spherion.com.
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This release contains statements that are forward looking in nature and, accordingly, are
subject to risks and uncertainties. Factors that could cause future results to differ from current
expectations include risks associated with: Competition our business operates in highly
competitive markets with low barriers to entry; Economic conditions any significant economic
downturn could result in lower revenues or a significant reduction in demand from our customers may
result in a material impact on the results of our operations; Customers a loss of customers may
result in a material impact on our results of operations; Debt and debt compliance market
conditions and
failure to meet certain requirements could impact our availability to borrow under our
revolving lines of credit and the cost of our borrowings; Corporate strategy we may not achieve
the intended effects of our business strategy; Termination provisions certain contracts contain
termination provisions and pricing risks; Failure to perform our failure or inability to perform
under customer contracts could result in damage to our reputation and give rise to legal claims;
Acquisitions managing or integrating past and future acquisitions may strain our resources;
Business interruptions natural disasters or failures with hardware, software or utilities could
adversely affect our ability to complete normal business processes; Tax filings regulatory
challenges to our tax filing positions could result in additional taxes; Personnel our business
is dependent upon the availability of qualified personnel and we may lose key personnel which could
cause our business to suffer; Litigation we may be exposed to employmentrelated claims and
costs and we are a defendant in a variety of litigation and other actions from time to time;
Government regulation government regulation may significantly increase our costs; International
operations we are subject to business risks associated with our operations in Canada, which
could make those operations significantly more costly; and Common stock the price of our common
stock may fluctuate significantly, which may result in losses for our investors, and further
decreases in the Companys common stock price and market capitalization may impact our ability to
comply with the NYSE continued listing standards. These and additional factors discussed in this
release and in Spherions filings with the Securities and Exchange Commission could cause the
Companys actual results to differ materially from any projections contained in this release.
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