Join us as we dissect the M&A strategy behind Staffing 360 Solutions acquisition of The Revolution Group.
On March 27, 2013, Staffing 360 Solutions, Inc. announced the acquisition of The Revolution Group, Ltd. (“TRG”) for an undisclosed purchase price. Staffing 360 is a publicly traded international staffing company based in New York, NY. TRG is a privately held staffing services and consulting company headquartered in Wakefield, MA with operations in 14 states and a specialized focus on cyber security.
Why Make the Acquisition
Staffing 360 was started with the objective of growing through acquisition. There are a number of large companies in the staffing industry, but the majority of the industry is made up of the 15,000 companies generating less than $20 million in annual revenue. In acquiring TRG, they acquired a small but rapidly growing company in a new niche.
What Synergies Will Be Achieved
The focus of the acquisition was on sales and distribution synergies. Staffing 360’s previous acquisition, which was its platform acquisition, was an international staffing company serving customers in the banking and financial services, healthcare, insurance, and technology industries. All of those customers have cyber security needs. By acquiring TRG, Staffing 360 will be able to offer TRG’s cyber security professionals to its existing customer base and thus grow the business being derived from that customer base. This is the typical sales and distribution synergy acquisition: big company buys small company to get its products then sell those products through big company’s extensive sales and distribution network.
How Did They Finance the Acquisition
Specific details of the funding were not discussed in the SEC filings, but Staffing 360 is a public company so they have access to equity and debt from the capital markets. In a previous acquisition Staffing 360 paid one half of the purchase price in cash and stock at closing and used seller financing for the remaining half of the purchase price.
Waypoint Private Capital
Waypoint Private Capital is an investment banking firm that educates and advises middle-market, privately held companies through critical stages of their business' life cycle. Waypoint helps business owners and entrepreneurs sell companies, buy companies, raise equity and debt capital for growth and recapitalization, and plan for a successful exit from the business.
To learn more visit waypointprivatecapital.com or call us at 608.515.3354 or 918.633.2647 and speak with a Waypoint Private Capital expert.
Steve Sprindis is co-founder and managing director of Waypoint Private Capital. © 2013 Waypoint Private Capital, Inc. All Rights Reserved.