Concurrent Session How to Implement an Acquisitive Growth Strategy

Transcription

1 Concurrent Session How to Implement an Acquisitive Growth Strategy Moderator: Timothy Landhuis, Research Manager, Staffing Industry Analysts Panelists: Al De Bellas, President, De Bellas & Co. Jeffrey Duclow, SVP, Staffing Services Group, Wells Fargo Capital Finance Dave Phillips, Managing Director, Childs Advisory Partners Vincent Rossy, CEO, CorTech

2 How does acquisitive growth fit within a company s overall strategy?

3 How should an acquirer go about defining and identifying a potential target?

4 What financing options are available? Cash Lines of credit (A/R based) Term loans Mezzanine debt Private equity group (minority or majority investor)

5 OVERVIEW TRADITIONAL FINANCING Leverage combined Companies Balance Sheet Cash on Hand Account Receivable - Line of Credit Term Loans Seller note (interest bearing) Earn- outs MINORITY RECAP/ GROWTH EQUITY 10% - 49% sale of equity Use of proceeds important in determining growth equity or dividend / distribution Governance, investor rights, put mechanism are very important MAJORITY RECAPITALIZATION Maximum valuation possible if fit is excellent Sell 51% - 80% of the equity to a private equity group Typically involves leverage Somewhat dependent on management objectives / willingness to stay active Often involves new equity security SOURCES Banks Mezzanine Lenders SBA Friends and Family Private equity firms that are comfortable with shareholder liquidity and holding minority positions Private equity firms focused on holding majority positions / full buy- outs Many of these firms will consider minority positions as well PROS Maintain 100% ownership Existing Management maintains decision making Leverage existing and /or expand funding relationships Partial liquidity today with additional exit event later Existing management maintains decision- making and majority control Access to growth / add- on acquisition capital Preserves brand and culture Addition of value- add equity partner and insightful Board representation Material liquidity today with additional exit event later Substantial cash upfront enables owner to take chips off the table while still sharing in future upside Financial backing for growth plans and / or acquisitions Incentive option pool established Addition of value- add equity partner and insightful Board representation CONS Managing additional debt/leverage on the business Personal Guarantees Cost of debt Source: CHILDS Advisory Partners Not a total exit Additional oversight and performance scrutiny Terms can force transaction in the future Loss of control Managing debt load and PEG oversights PEGs may have concerns in cashing out too much of management s share Complicates the capitalization

6 How much time do acquisitions take? What advisors/staff do you need?

7 How do you ensure a successful integration?

8 Based on your experience, what is your best advice on growth via acquisition?

9 2017 by Crain Communications Inc. All rights reserved.

10 Appendix: 1Q16 Selected Acquisitions Buyer Acquired Company Active Staffing Services Blass Employment Corp. Advanced Discovery Legal Placements Inc. AtWork Group Desert Personnel Services Bear Staffing Action Personnel Services Belcan LLC Tandel Systems Cenergy International HKA Enterprise General Employment Enterprises Paladin Consulting Inc. Hire Velocity BHS Hire LLC Intersect Group 3Ci JW Michaels & Co Execusource Inc. MSI International Masters IT LLC MTS Health Investors LLC HCCA Health Connections Inc. HCCA International Optimum Talent and Conroy Ross Partners Toombs Inc (Vancouver office only) Provision Corporate Ladder Sharp Decisions Inc. CN- TEC (Denver and Phoenix offices only) The Fahrenheit Group Bencks & Co The Hamilton- Ryker Group Omni Personnel The TemPositions Group of Companies Opus Staffing and Opus Scientific Trillium Staffing Atlantic Associates Inc. Vector Technical Resources EEI Communications (staffing division) Vistra Group Supplemental Health Care

11 Appendix: 2Q16 Selected Acquisitions Buyer Advanced Medical Personnel Services Inc. Alliance Resource Group AMN Healthcare Command Center Compunnel Software Group, Inc. Construction Labor Contractors LLC CorTech LLC Elwood Staffing Acquired Company Rise Medical Staffing The Bennett Group Peak Health Solutions Hancock Staffing Sherwood Consulting, dba Base36 Inc. Skilled Labour Solutions Penski Staffing White Staffing Management Source: SIA Staffing Merger and Acquisition Annual Report 2016

12 Appendix: 3Q16 Selected Acquisitions Buyer Acquired Company Advanced Medical IPI Travel Nursing AlliancePharma Inc. Pro- J- Pharma Blueline associates BlueStaff (IT division only) CHG Healthcare Services Global Medical Staffing CorTech LLC MSI International Diversified Search BioQuest Elwood Staffing Berks and Beyond Employment Services Energy Staffing Solutions Labor Smart (Marietta and Knoxville branches only) Malone Workforce Solutions Nextaff Mdstaffers LAM and Associates Mitchell Martin Inc Spring Lake Consulting Noor Staffing- SearchPointNY The Legal Group Onin Group Universal Labour and Staffing Pediatric Therapy Services AlphaVista Services The Service Companies Drake Staffing Therapy Staff TheraStaff LLC Transforce KAS Personnel Services Vaco Momentum Resources Workway Regal Personnel ZRG Partners McLean Consulting Source: SIA Staffing Merger and Acquisition Annual Report 2016

13 Appendix: 4Q16 Selected Acquisitions Buyer Accountable Healthcare Staffing Inc. BelFlex Staffing Network BelHealth Investment Partners LLC Blackstone and co- investors Compunnel CorTech Decton Highlands Ventures Kyyba Inc. New Heritage Capital Peoplelink Group Revel Consulting RSR Partners Seek Careers/Staffing Inc. Stone Resource Group StraussGroup Vaco Healthcare Vaco Healthcare Yoh Source: SIA Staffing Merger and Acquisition Annual Report 2016 Acquired Company Horizons Medical Staffing and Hopewell Healthcare First Line Emergency Response Team (FLERT) AHS Staffing Team Health Holdings Jobhuk Resources4Staffing Cutting Edge Staffing Sonoma Consulting ASG Renaisance (staffing contracts only) Execu Search TeamSoft Two Shea Consulting Higdon Partners Landmark Staffing Resources ServParters Fiorella Search Group Pivot Point Consulting Greythorn Starpoint Solutions

14 Two Easy Ways to Give Feedback Rate sessions on the Conference Community (all sessions) Fill out Evaluation Card on your chair (concurrent sessions)

15 Coming up Networking Lunch 12:30-2:00 PM Seaview & Marina Lawn Sponsored by

16 After lunch Probing the Human Cloud Interviews 2:00 PM Rob Biederman, CEO, Catalant Technologies Coronado AB Jody Miller, Co- Founder & CEO, Business Talent Group Coronado C Mynul Khan, CEO, Field Nation Coronado DE Eddie Lou, CEO & Co- Founder, Shiftgig Regatta ABC

17 After lunch cont d Ideas in Action (4th level) 2:00 PM Looking for More Efficiency in Your Hiring? Meet Predictive Analytics for Job Ads Presented by Job2Careers America s Cup B Automate or Die: Reinvent Your Staffing Business Presented by EmployStream America s Cup D