On Assignment To Acquire ECS Federal For $775 Mln

(RTTNews) - On Assignment, Inc. (ASGN) Wednesday said it has signed a definitive agreement to acquire ECS Federal, LLC from Roy Kapani, the company's majority owner and founder, and Lindsay Goldberg, a private investment firm, for $775 million in cash. Further, On Assignment said it intends to change its name to ASGN Inc., effective April 2, 2018.

ECS is a privately-held government services contractors, delivering cyber security, cloud, DevOps, IT modernization and advanced science and engineering solutions to government enterprises. The transaction is expected to close on April 2, 2018.

On Assignment also announced priliminary fourth quarter profit of $67.3 million or 1.28 per share. Revenue for the quarter is expected to be $679 million. On an adjusted basis, earnings would have been $76 million or $1.44 per shares.

ECS will become a division of On Assignment and continue to operate under the ECS brand name. The CEO of ECS, George Wilson, and the current leadership team will continue.

For the year, 2017, ECS estimates its revenues and Adjusted EBITDA on a pro forma basis to be approximately $586.4 million and $67.6 million, respectively. For 2018, ECS expects high single-digit year-over-year revenue growth.

On Assignment estimates its revenues and net income for the year to be approximately $2.6 billion and $157.7 million, respectively and its Adjusted EBITDA to be approximately $311.4 million.

On a pro forma basis, revenues and Adjusted EBITDA are estimated to be approximately $3.2 billion and $379 million, respectively. Additionally, the acquisition is accretive to On Assignment's 2017 Adjusted Net Income.

In connection with the transaction, On Assignment has obtained a $1.6 billion financing commitment from Wells Fargo.