AccuStaff to buy Career Horizons for $1 billion Acquisition makes firm nation's fourth largest temporary staff company

August 27, 1996|By NEW YORK TIMES NEWS SERVICE

AccuStaff Inc., a fast-growing provider of temporary workers, said yesterday that it had agreed to acquire Career Horizons Inc., a smaller competitor, in a $1 billion stock swap.

The transaction, subject to approval by shareholders and regulators, would create a combined company providing strategic staffing, consulting and outsourcing services through a network of more than 750 offices in 43 states with estimated 1996 revenues of more than $1.3 billion.

AccuStaff, based in Jacksonville, Fla., said it expects the transaction to be completed by the end of the year.

Career Horizons, with headquarters in Woodbury, N.Y., will operate as a subsidiary when the merger is complete. Walter Macauley, the company's president and chief executive, will become vice chairman of the new company, AccuStaff said.

Last year, Career Horizons posted revenues of $385 million; that amount is expected to rise to more than $600 million this year. AccuStaff is expected to record revenues of nearly $750 million this year.

"This merger will create one of the strongest and most diversified national companies in the staffing industry," said Derek Dewan, chairman, president and chief executive of Accustaff. "We have a number of acquisitions to pursue, and Walt Macauley will add tremendous value to this area."

Career Horizons' shareholders will receive 1.53 shares of Accu- Staff stock for each share of Career Horizons.

Although industry analysts said the deal makes good sense for AccuStaff, news of the acquisition did not sit well with investors yesterday.

Shares of AccuStaff, which went public in 1994 at just under $2 a share after adjusting for splits, fell $3, to $25.

But Career Horizons' shares jumped $5.125, to $37.

"I think this is an excellent fit, in terms of philosophy, geography and service," Judith Scott, a managing director and analyst at Robert Baird & Co. in Milwaukee, said.

The combination would make AccuStaff the fourth-largest temporary-services provider in the country.

The industry has more than doubled in size since 1990, to an estimated $39.2 billion this year. It continues to be led by Manpower Inc., which Ms. Scott estimated would do about $5.5 billion in business this year.

After Manpower, the two biggest companies in terms of revenues are the Olsten Corp. and Kelly Services Inc.

But AccuStaff, which has acquired 33 staffing companies in two years, is moving fast.

"Our industry is consolidating because large companies are requiring a delivery network capable of serving them in multiple locations in a wide variety of services," Dewan of AccuStaff said in a telephone interview.

"There are few providers that can deliver on that basis, and virtually none who can do what we are doing," he said, referring to the wide range of professionals his company has to offer.

Corporate downsizing in the 1990s has been a boon to providers of temporary employees, because even though full-time jobs disappeared, the need for a wide variety of services did not.

Companies like AccuStaff and Manpower have stepped in to fill that void.

"Temporary staffing has taken on a whole different connotation in the last five years," Daniel McKinley, an analyst at J. C. Bradford, said.

"It is no longer just the lowest level of clerical and industrial fill-ins, but the entire gamut of positions, from accountants, lawyers and computer engineers all the way up to the highest levels, including chief executives."

Pub Date: 8/27/96

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