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Staffmark Holdings has filed paperwork for an initial public stock offering

Staffmark Holdings, the privately held Cincinnati-based provider of temporary staffing solutions, has filed paperwork for an initial public stock offering (IPO).

Staffmark plans to raise up to $125 million in the offering on the New York Stock Exchange, under the sticker STMK. It would use the money from the offering, being underwritten by UBS Investment Bank and BMO Capital Markets, to pay back an existing line of credit and make acquisitions.

In its filing, Staffmark sees growth for the temporary staffing industry because of the increasing cost of full-time employees, the need for businesses to be agile and an aging U.S. population. And because the temporary staffing industry is fragmented, Staffmark sees "a compelling consolidation opportunity" to acquire "small, local and regional high-quality staffing firms."

Neither the number of shares nor the initial price nor the timing of the IPO has been set, according to a 225-page document filed with the Securities and Exchange Commission.

Staffmark is ranked as one of the top 10 commercial staffing companies in the United States. It specializes in offering light industrial and clerical temporary workers to middle-market companies.

It posted $1 billion in revenues and profits of $15.4 million in 2010, according to the filing. The company had a loss of $38.2 million in 2009, after making $5.2 million in 2008.

Staffmark, which was founded in 1970, ranked fourth on the 2010 Deloitte Cincinnati USA 100 list of the biggest privately held businesses based in Greater Cincinnati and Northern Kentucky. The company listed 1,000 full-time employees.

In the filing, Staffmark said it had 6,000 clients with operations at 300 branch and on-site offices in 31 states. About 60 percent of its revenues came from six states - California, Ohio, Texas, Arkansas, Tennessee, Pennsylvania and North Carolina. The filing says the company generated 22 percent of its revenues from its 10 biggest clients.

Compass Diversified Holdings, a Westport, Conn.-based public company that owns a range of firms making a wide variety of products and services, will "continued to own a large percentage of our voting stock after this offering, which will limit your ability to influence corporate matters subject to stockholder approval," according to the SEC filing.

Compass purchased a controlling interest in Staffmark's predecessor in May 2006. It currently holds 76 percent of the shares in Staffmark.

The company's president is Lesa Francis, who joined the company in 2009. Last month, she added the title of CEO after the planned retirement of Fred Kohnke, who continues as a consultant to the company and on its board.

Kohnke joined CBS Personnel Holdings Inc., the predecessor to Staffmark, in February 2001, and planned his retirement to coincide with his 10-year anniversary.

Francis and Kohnke received total compensation of $1 million and $1.4 million respectively in 2010, according to the SEC filing.


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