On Assignment to acquire Creative Circle for $570m
With the addition of Creative Circle, On Assignment will be able to provide broader staffing services that support its clients as they transform their business models and marketing demands towards digital enterprises.
The acquisition is expected to be immediately accretive to On Assignment’s GAAP earnings per share and adjusted earnings per share (without any synergy savings) in 2015.
Creative Circle is one of the largest digital/creative staffing firms in North America and provides digital, marketing, advertising, and creative talent to both creative agencies and marketing departments of leading companies.
Creative Circle has achieved a three- year compounded annual growth rate of 26% since 2011. In 2014, the company had approximately $226 million in revenues with an EBITDA margin of approximately 21%. Creative Circle expects to achieve double-digit top line growth in 2015.
“Technology has accelerated digital innovation and the way consumers access content. As such, our clients are faced with the need to remain competitive by transforming their business models to effectively respond to consumer demand for digital information and services on a real time basis,” said Peter T. Dameris, On Assignment’s President and Chief Executive Officer.
“By working together, we can do more for our clients to accelerate their transformation to a digital platform by providing our respective clients with a more complete solution in the technology and digital/creative space.
“Our two companies share a common goal of putting people to work in challenging roles and the timing could not be better as the lines between IT and marketing departments are starting to converge as consumers demand real time content from any device anywhere in the world.
“On Assignment's strength in technology staffing combined with Creative Circle’s expertise in the digital/creative space will allow us to engage the CMO along with the CIO to provide solutions that meet the increasing needs of both groups while driving greater demand for our traditional services.”
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.
“On Assignment is one of the more innovative and competitive companies within the professional staffing space,” said Lawrence Serf, Creative Circle’s Chief Executive Officer. “Like On Assignment, Creative Circle provides its clients with the highest quality solutions to staffing challenges and offers professionals unparalleled employment opportunities in their chosen field. We are excited to be an important part of On Assignment’s ongoing growth.”
“On Assignment and Creative Circle share a very similar culture and vision,” said Dennis Masel, Creative Circle’s Chief Operating Officer. “As we analyzed how best to continue to grow our company, joining On Assignment quickly became the logical choice.”
The transaction will expand On Assignment’s consolidated gross and EBITDA margins. On a pro forma basis, 2014 revenues and EBITDA margin were $2 billion and 12.4% respectively.
Dameris concluded, “Additionally, this acquisition brings us closer to achieving our $3 billion target in annual revenues by 2018.”