Staffing 360 Solutions announces sale of Cyber 360
The public company, which is executing a global buy-and-build strategy through the acquisition of staffing organizations, with operations in the US and Europe, completed the transaction after its Board of Directors elected to discontinue Cyber 360's operations as part of its Pathway to Profitability initiative.
The buyers purchased the entity for a nominal purchase price of $1 and were issued 1.1 million shares of common stock at $1 per share. As a result of the sale, Staffing 360 Solutions eliminated over $1.6 million in liabilities from its balance sheet.
"Staffing 360 Solutions is pleased to close this transaction as we continue to improve our balance sheet and position our company for additional growth," said Matt Briand, President and CEO of Staffing 360 Solutions. "As our first acquisition, Cyber 360 will always represent an important part of our journey. However, as discussed on our recent earnings conference calls, the subsidiary had an impaired status on our financial statements since our last annual filing. With our continued focus on where we can have the greatest impact on our Pathway to Profitability, it became increasingly clear that this was the right move for both organizations."
Representing less than 3% of the Company's total revenue, the management team does not expect the sale of Cyber 360 to have a material effect on the overall business. The Company's Monroe Staffing, PeopleSERVE and Longbridge divisions -- which represent over 90% of combined revenues -- have all experienced meaningful organic growth since being acquired. In fact, management believes that this transaction is expected to improve the attractiveness of the Company as a whole as it pursues additional financing and M&A opportunities. Including this transaction, the Company has eliminated an aggregate of over $8 million in liabilities since its Board of Directors approved the Pathway to Profitability in September 2014.
"Our Pathway to Profitability is continuing to take shape," said Brendan Flood, Executive Chairman. "This sale supports our upcoming M&A plans, as well as our capital raising initiatives. In fact, we are pleased to announce that we have a term sheet in place for one of our next potential financings. Obviously, no financing is complete until due diligence is finalized and funds are in hand, but considering the improvements we have made to our balance sheet, combined with our current M&A pipeline, we believe we are making significant progress. We are focusing on acquiring larger organizations with a keen eye on profitability as we position Staffing 360 Solutions for future growth."
Staffing 360 Solutions believes that a consolidation strategy is ideally suited for the highly fragmented temporary staffing industry. There are an estimated 15,000 staffing companies generating less than $20 million in annual sales in the United States alone.