AccuStaff to Acquire Career Horizons in $1-Billion Deal
AccuStaff Inc. has signed a definitive agreement to acquire Career Horizons Inc. in a deal valued at $1 billion that would create the nation’s fourth-largest employment company, the firms said Monday.
The acquisition would be AccuStaff’s 34th in the last two years and its biggest ever. Career Horizons’ emphasis on finding employees for computer, health-care and financial services would complement AccuStaff’s strengths in telemarketing, clerical, law and accounting, analysts said.
“They are aiming for national accounts, and to do that you have to have offices and a full array of services,” said Peter Vozzo, analyst with Unterberg Harris.
The new company, which would operate as AccuStaff Inc., would provide staffing, consulting and outsourcing services. It would have more than 750 offices in 43 states and annual revenue of more than $1.3 billion. Annual revenue is projected to surpass $1.7 billion in 1997.
Shares of Career Horizons jumped $5.125 to $37 on the New York Stock Exchange after the announcement. AccuStaff stock fell $3 to $25 on Nasdaq.
“Both AccuStaff and Career Horizons have been major consolidators in the industry, and this transaction accelerates that trend, creating an even stronger platform for growth and additional acquisitions,” said Derek Dewan, AccuStaff chairman, chief executive and president. “Our combined cash position, together with credit facilities, gives us the liquidity to make strategic and even larger acquisitions.”
Since its initial public offering in August 1994, Jacksonville, Fla.-based AccuStaff has completed 33 acquisitions in the staffing industry. Its 1996 revenue was projected to reach $772 million before the latest merger.
Woodbury, N.Y.-based Career Horizons provides temporary personnel for clerical, commercial, hospital and other health-care functions and for information technology. Its revenue for 1995 was $385 million and is projected to reach about $613 million for 1996. It has 574 offices in 43 states.
Under the agreement, AccuStaff will offer about 1.53 shares of its stock for Career Horizons’ shares in a tax-free pooling of interests. The exchange ratio is subject to adjustment, and will range from 1.2444 to 1.8006.
Based on AccuStaff’s $28-per-share closing price as of Friday, the deal was valued at about $1 billion, the companies said in a statement.
The deal, which has been unanimously approved by the companies’ boards, is expected to close during the fourth quarter.
