Professional staffing firm On Assignment Inc. has boosted both its global presence and its strength in the growing clinical research sector with the acquisition of a Western European firm.
On Dec. 22, the Calabasas-based firm announced that it signed a letter of intent to acquire the unnamed company for about $17 million. The transaction, which has a two-year earn-out component, is expected to be complete within 45 days.
On Assignment President and CEO Peter Dameris said he is not yet disclosing the company’s name and exact location due to certain acquisition procedures that still need to occur.
“The reason to acquire this business is they have a very, very good reputation in Western Europe where a lot of the multinational pharmaceutical companies are based, and it is a better coverage to service our customers both in the United States and overseas,” Dameris said. “We plan to open additional branch offices throughout Europe with this business, and if we continue to the extent that we’re performing well and our capitalization is correct, we plan to continue acquiring businesses.”
Dameris also said the soon-to-be acquired company also has margins that are consistent with On Assignment’s life science staffing business, long-term assignments and high bill rates. The acquired company was projected to have $24 million in revenues for 2010 with $4 million in adjusted EBITDA.
Beside its life science sector, which offers staffing services in clinical research and laboratory services, the company also provides staffing for the healthcare, nursing and physicians, medical financial, information technology and engineering categories.
However, Dameris said scientific clinical research is one of the company’s arenas that have seen the most growth. The other top-growing arena is information technology.
“Math and science are in a shortage, and our customers are looking to us to (fill) that void and also use those skills when they want them, how they want them and for as long as they want them,” Dameris said. “A good portion of our revenues in the life science group is more of the scientific laboratory environment versus clinical research, and throughout the last couple of years, we’ve had a concerted effort to expand our clinical research practices through organic growth and acquisitions.”
In April, On Assignment acquired The Cambridge Group Ltd., a 35-year-old company that Dameris described as having a focus on the statistics and bio-statistics arena. The company was based in Westport, Conn.
In July, On Assignment also acquired Sharpstream, a London-based staffing company that focuses on staffing for mid-level and above executives in clinical research. The company has branch offices in Philadelphia and in Shanghai.
Dameris said On Assignment, which has been in business for 25 years, started out as a scientific staffing firm that eventually branched out into its other sectors.
On Assignment’s planned acquisition also further expands its international presence. The company’s branch network currently encompasses more than 70 branch offices across the United States, the United Kingdom, Netherlands, Ireland, Belgium and China. Physician services are also provided in Australia and New Zealand.
Dameris said the company’s international expansion has been due to the needs of customers more than anything.
Higher stock price
Meanwhile, the company’s stock price has been rising over the past year. As of Dec. 29, the closing price of $8.52 reflected a 20 percent increase over the previous year.
In a research report on the company released by ValuEngine Inc. on Dec. 29, market analysts gave the stock a “hold” recommendation.
“Based on the information we have gathered and our resulting research, we feel that On Assignment has the probability to roughly match average market performance for the next year,” ValuEngine’s report stated.
According to the report, On Assignment was in line with its industry group in terms of its stock valuation rank, stock performance over the past 12 months, average annual stock return over the last five years, stock volatility, market capitalization and other measures.
On Assignment had a moderately higher earnings per share growth rank in comparison to the industry rank.