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UPDATE 2-On Assignment to buy Apex Systems, shares soar
March 20, 2012 / 8:32 PM / 6 years ago

UPDATE 2-On Assignment to buy Apex Systems, shares soar

* Deal valued at $600 mln, including debt

* Expects deal to “significantly” add to profit in 2012

* On Assignment shares up 31 pct post market

March 20 (Reuters) - U.S. staffing provider On Assignment Inc agreed to buy privately held rival Apex Systems Inc for $600 million, including debt, and said it expects the deal to “significantly” add to the company’s 2012 earnings.

On Assignment shares, which have more than doubled in nearly six months, rose 31 percent to $17.87 in trading after the bell. They closed at $13.68 on Tuesday on the Nasdaq.

“The transaction also achieves On Assignment’s five-year strategic plan to reach $1 billion in annual revenue three years ahead of schedule,” Chief Executive Peter Dameris said in a statement.

The company, which provides flexible and permanent staffing, posted $597 million in revenue for the year ended December 2011.

On Assignment, which competes with Insperity Inc, Trueblue Inc and Kelly Services Inc, currently has a market capitalization of $533.3 million.

Richmond, Virginia-based Apex Systems specializes in contract, temp-to-perm and direct placements. Founded in 1995, it operates in 49 locations across the United States.

The number of temps -- who make up for 1.86 percent of the U.S. labor force -- has increased for eight months in a row now.

Analysts expect that metric to pass its April 2000 peak above 2 percent as more employers embrace temporary labor in an uncertain economic climate.

Staffing firms have been buying smaller peers in emerging markets or sizable businesses in markets such as the United States. The latest had been staffing giant Adecco’s 90 million euros ($116.8 million) deal for Japan-based VSN Inc.

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