On Assignment To Acquire Creative Circle; Provides Financial Estimates For H2

(RTTNews) - On Assignment Inc. (ASGN) announced that it agreed to acquire privately-held Creative Circle, LLC for $570 million in cash and equity, and up to an additional $30 million based on future operating performance. The consideration at closing is comprised of $540 million in cash and $30 million of common stock.

On Assignment provides estimates of its operating results from continuing operations for the second half of 2015. it expects Income from continuing operations to be in the range of $45.9 million to $48.4 million or $0.87 to $0.92 per share, adjusted income from continuing operations of $80.7 million to $83.2 million or $1.53 to $1.57 per share, and Revenues $1.087 billion to $1.103 billion.

The acquisition is expected to be immediately accretive to On Assignment's GAAP earnings per share and adjusted earnings per share, without any synergy savings, in 2015.

Creative Circle is one of the largest digital/creative staffing firms in North America and provides digital, marketing, advertising, and creative talent to both creative agencies and marketing departments of leading companies. Creative Circle has achieved a three- year compounded annual growth rate of 26% since 2011. In 2014, the company had approximately $226 million in revenues with an EBITDA margin of approximately 21%. Creative Circle expects to achieve double-digit top line growth in 2015.

Creative Circle will become a division of On Assignment and continue to operate under the Creative Circle brand name. The current leadership team will continue to oversee the day-to-day operations of the business.

"Additionally, this acquisition brings us closer to achieving our $3 billion target in annual revenues by 2018," said Peter Dameris, On Assignment's President and Chief Executive Officer.

In connection with the transaction, On Assignment has obtained a secured financing commitment for $975 million from Wells Fargo Bank, National Association. The new credit facility consists of a $100 million revolving credit facility (undrawn at close) and an $875 million term loan. The proceeds of the term B loan will be used to finance the cash portion of the purchase price and refinance existing On Assignment debt.

The acquisition remains subject to regulatory approvals and customary closing conditions. The transaction is expected to close before the end of the second quarter.