On Assignment to Meet Growing Demand for Professionals with Digital/Creative and IT Skills
Transaction Is Immediately Accretive to On Assignment EPS
CALABASAS, Calf.--(BUSINESS WIRE)--On Assignment, Inc. (NYSE: ASGN), a leading global provider of
diversified professional staffing solutions, today announced the
completion of its acquisition of privately held Creative Circle, LLC for
$570 million, and up to an additional $30 million based on operating
performance during 2015.
“With the addition of Creative Circle, On Assignment will be able to
provide a broader range of staffing services to our clients as their
business models and marketing demands focus on digital solutions,” said
Peter T. Dameris, On Assignment’s President and Chief Executive Officer.
“Consumers’ rapidly growing demand for real-time information and
services requires an increase in highly skilled, talented professionals
to support this digital platform. The need for technical and creative
services creates a great opportunity for us to align Creative Circle
with our On Assignment divisions that specialize in IT to expand our
service offering.”
Under the terms of the purchase agreement, On Assignment acquired all of
Creative Circle’s equity for consideration of $570 million, plus
additional consideration of up to $30 million if certain performance
targets for 2015 are achieved. The consideration at closing was
comprised of $540 million in cash and $30 million of equity (794,700
shares of the Company’s common stock). The acquisition is immediately
accretive before any synergy savings to On Assignment’s GAAP earnings
per share and adjusted earnings per share.
In connection with the acquisition, On Assignment entered into a new
$975 million credit facility. Proceeds from the new facility were used
to fund the cash portion of the purchase consideration and repay
borrowings under the existing credit facility. At closing, approximately
$875 million will be outstanding under the facility. The new credit
facility is comprised of an $825 million seven-year term B loan, which
bears interest at LIBOR (floor of 75 basis points) plus 3.0 percent and
a $150 million five-year revolving credit facility, which bears interest
at LIBOR plus 2.5 percent. The term B loan was issued with an original
issue discount of 50 basis points. Wells Fargo Bank, National
Association served as the administrative agent for the credit facility.
In connection with the closing, On Assignment also granted restricted
stock unit awards to 55 Creative Circle employees covering an aggregate
of 143,070 On Assignment shares. Of these, two executives were granted
awards that will vest, subject to continued service, (a) as to 40% of
the award over three years based on the achievement of performance
targets for each of the three years following the closing, and (b) as to
60% of the awards in three equal installments on the first anniversary
of the closing date and upon January 1 of 2017 and 2018 if a 2015
performance target is achieved. The awards granted to the other Creative
Circle employees will vest, subject to the employee’s continued service,
(a) as to 40% of the award over four years with 25% of each award
vesting on the first anniversary of the closing and the remaining 75%
vesting in 12 substantially equal quarterly installments thereafter, and
(b) as to 60% of the award initially vesting in 12 substantially equal
quarterly installments beginning on April 1, 2016 and on each quarterly
anniversary thereafter if a 2015 performance target is achieved. The
restricted stock unit awards were granted to the Creative Circle
employees as employment inducement awards pursuant to New York Stock
Exchange rules.
Creative Circle will become a division of On Assignment and continue to
operate under the Creative Circle brand name. The current leadership
team will continue to oversee the day-to-day operations of the business.
Dameris added, “We look forward to working with the talented team at
Creative Circle to best serve our respective clients with a complete
digital staffing solution. Additionally, with Creative Circle joining On
Assignment, we move closer to achieving our $3 billion target in annual
revenues by 2018.”
About Creative Circle
Founded in 2002, Creative Circle is one of the largest creative staffing
agencies in North America, providing digital, marketing, advertising,
and creative talent to a wide range of companies. Creative Circle has
developed a business model that enables it to attract and place
high-level talent on demand. The collaborative, team-based approach
between account executives and recruiters includes a diligent screening
process of all candidates to ensure the right fit for each and every
placement.
About On Assignment
On Assignment, Inc. is a leading global provider of in-demand, skilled
professionals in the growing technology, life sciences, and creative
sectors, where quality people are the key to success. The Company goes
beyond matching resumes with job descriptions to match people they know
into positions they understand for temporary, contract-to-hire, and
direct hire assignments. Clients recognize On Assignment for its quality
candidates, quick response, and successful assignments. Professionals
think of On Assignment as career-building partners with the depth and
breadth of experience to help them reach their goals.
On Assignment, which is based in Calabasas, California, was founded in
1985 and went public in 1992. The Company has a network of branch
offices throughout the United States, Canada, United Kingdom, and
Europe. To learn more, visit http://www.onassignment.com.
Safe Harbor
Certain statements made in this news release are “forward-looking
statements” within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended, and involve a high degree of risk and
uncertainty. Forward-looking statements include statements regarding the
Company’s anticipated financial and operating performance in 2015, and
other statements regarding the expected performance of On Assignment and
of the combined company. All statements in this release, other than
those setting forth strictly historical information, are forward-looking
statements. Forward-looking statements are not guarantees of future
performance, and actual results might differ materially. In particular,
the Company makes no assurances that the estimates of revenues or
earnings per share set forth above will be achieved. Factors that could
cause or contribute to such differences include actual demand for our
services, our ability to attract, train and retain qualified staffing
consultants, our ability to remain competitive in obtaining and
retaining clients, the availability of qualified temporary
professionals, management of our growth, continued performance of our
enterprise-wide information systems, our ability to manage our potential
or actual litigation matters, the successful integration of our recently
acquired subsidiaries, the successful implementation of our five-year
strategic plan, and other risks detailed from time to time in our
reports filed with the Securities and Exchange Commission (“SEC”),
including our Annual Report on Form 10-K for the year ended December 31,
2014, as filed with the SEC on March 2, 2015 and our Form 10-Q for the
three months ended March 31, 2015, as filed with the SEC on May 8, 2015.
We specifically disclaim any intention or duty to update any
forward-looking statements contained in this news release.
Contact:
Media Inquiries:
Muirfield Partners
Mickey Mandelbaum
Maya Pogoda
310-785-0810
or
Investor Inquiries:
On Assignment, Inc.
Ed Pierce
Chief Financial Officer
818-878-7900