StaffMark Makes Its Largest Acquisition to Date

London-Based Firm, Robert Walters plc, Gives Company Increased Global Presence

StaffMark Inc. of Fayetteville will achieve the level of global presence it wants when it completes the acquisition of a London-based staffing company late this year.

StaffMark announced last month that it is acquiring Robert Walters plc. The company has 18 offices in major cities in 10 countries around the world. Previously, StaffMark had small operations in countries outside the United States.

“This is our first significant entry into those countries,” says Robert Janes, executive vice president of acquisitions for StaffMark.

StaffMark, which has acquired more than 30 companies in the past two years, had been shopping for an acquisition that would expand the company’s global presence for almost a year before choosing Robert Walters.

“This was, by far, our first choice,” Janes says.

Robert Walters is the largest acquisition by StaffMark and the first of a publicly traded company. Robert Walters became a public company the same year as StaffMark and specializes in placing accounting, finance and information technology professionals on a contract, temporary and permanent basis with clients in the advertising, technology, retailing and financial sectors.

“This is our largest transaction to date and will provide StaffMark with critical mass in the U.K. as well as significant platforms for growth in continental Europe, Australia and Asia,” says Clete Brewer, president and CEO of StaffMark.

Robert Walters gives StaffMark offices in London, Windsor and Wellington, all in England; Amsterdam, Holland; Auckland and Wellington in New Zealand; Brisbane, Sydney and Melbourne in Australia; Brussels, Belgium; Frankfurt, Germany; Hong Kong, China; Johannesburg, South Africa; Singapore and New York.

The agreement between the companies gives stockholders of Robert Walters 0.272 shares of StaffMark stock for each share of stock in Robert Walters. The transaction has to be approved by stockholders of both companies, the U.S. Securities and Exchange Commission and the High Court in London. Janes says he hopes to finish the transaction by the fourth quarter of this year. When completed, stockholders of Robert Walters will own about 24 percent of the stock in StaffMark.

Brewer will continue as president and CEO of StaffMark and Robert Walters will remain as president of his company. Walters also will be invited to join the board of directors for StaffMark. Two other key executives of Robert Walters, Ben Anderson and Giles Daubney, will take a leading role in the global expansion of the combined companies.

“By combining our international network with StaffMark’s U.S. coverage, we will create a genuinely international recruitment and human resources solutions group,” says Walters.

Robert Walters operates in the United Kingdom, continental Europe, the United States, the Asia Pacific region and South Africa. The company’s operations are divided into four divisions: Robert Walters Associates, the permanent recruitment division; Robert Walters Resourcing, the contract and temporary recruitment division; Robert Walters Technology, which provides employees for technical jobs; and Resource Solutions, which provides outsourcing.

In the first six months of this year, StaffMark reported revenues of $325.9 million and operating income of $25.1 million. For the same period, Robert Walters had revenue of $118.6 million with operating income of $6.7 million. Both companies had a compound annual revenue growth of more than 70 percent during the past four years.

The combined companies will operate more than 240 offices in 10 countries with 74 percent of the revenue coming from the United States and 21 percent from the United Kingdom. About 55 percent of the revenue will be produced by professional and information technology staffing.

The Robert Walters acquisition was the second StaffMark announced in August. Earlier in the month, StaffMark acquired Enterprise Systems Associates Inc. and Computer Staffing Group, both based in Kansas City. The two companies specialize in providing workers for information technology businesses and will be integrated into StaffMark’s subsidiary. The two companies had revenue of about $14 million in the 12 months previous to the acquisition.

StaffMark was formed by combining six regional staffing firms in 1996. The company went public in October 1996 and is now one of the world’s leading staffing agencies.