On Assignment closes acquisition of CyberCoders Holdings
On Assignment has announced the completion of its acquisition of CyberCoders Holdings, a leading technology-enabled permanent placement recruiting firm.
This closing follows the execution of the Stock Purchase Agreement between the parties on November 25, 2013 which was previously announced on Monday, December 2, 2013.
“With CyberCoders as our newest division, On Assignment will be able to expand our activities in permanent placement staffing,” said Peter T. Dameris, President and Chief Executive Officer of On Assignment. “We will be able to better serve our customers with these expanded placement options.”
Under terms of the Agreement, On Assignment acquired CyberCoders for $94 million in cash and up to an additional $11 million based on future operating performance. The purchase price was funded out of cash on hand and borrowings under the Company’s revolving credit facility.
Estimated 2013 revenues for CyberCoders are $55 million with an EBITDA margin of approximately 25 percent. The inclusion of CyberCoders will increase the Company’s mix of permanent placement revenues to over 4.5 percent of consolidated revenues (currently at 1.7 percent) and result in an expansion of 175 to 200 basis points in consolidated gross margin and 50 basis points in Adjusted EBITDA margin (a non-GAAP term defined below). The Company believes CyberCoders’ growth rate in 2014 will be in the high teens.
“We are thrilled to be joining On Assignment,” said Heidi Golledge, CEO and founder of CyberCoders. “On Assignment has a proven track record of partnering with great companies and providing them with the support needed to help them grow and thrive.”
CyberCoders will become a division of On Assignment and continue to operate under the CyberCoders brand name. Heidi Golledge and Matt Miller, Chief Technology Officer, will continue to oversee the day-to-day operations of the business. Golledge will report to On Assignment’s Chief Operating Officer Michael McGowan.
In connection with the acquisition, On Assignment granted Ms. Golledge a restricted stock unit award covering 15,000 shares of On Assignment’s common stock, and other members of the management team received an aggregate of 35,000 restricted stock units. The restricted stock unit awards will vest, subject to continued service, with respect to 50% of the units on the second anniversary of the grant date, and with respect to the remaining units, over the following two years in substantially equal quarterly installments. The restricted stock unit award for Ms. Golledge will be granted as an employment inducement award pursuant to the NYSE rules.
“We believe all business lines will benefit from the new cross-selling opportunities,” Dameris said. “We are excited to welcome the talented team at CyberCoders to the On Assignment family.”