Atlas Acquisition Holding Corp. (“Atlas”, NYSE AMEX:AXG, AXG.U,
AXG.WT) and Koosharem Corporation, a California corporation doing
business as the Select Family of Staffing Companies (“Select
Staffing”) today announced that they have entered into a definitive
agreement and plan of merger. The combined company will be named
Select Staffing, Inc. and will continue to trade on the NYSE Amex
until the approval of the planned application to transfer listing
to the NYSE. The proposed transaction is valued at approximately
$840 million.
Select Staffing is a leading provider of temporary staffing and
employment services in the U.S., with nationwide operations across
multiple contingent staffing sectors. The Company reported revenue
of more than $1.4 billion in 2008 and maintains strong profit
margins through industry-leading cost management practices. Select
Staffing has grown at a compounded annual rate of 37% over the last
four years both organically and through acquisition.
Atlas is a special purpose acquisition company (SPAC) formed in
January 2008 by James Hauslein, Chairman and Chief Executive
Officer, and Gaurav Burman, President, for the purpose of acquiring
an operating business. Atlas had approximately $200 million in
assets in trust as of September 30, 2009.
Following the completion of the merger, Select Staffing’s
current management team will remain in place with D. Stephen
Sorensen serving as Chairman and Chief Executive Officer, Paul J.
Sorensen as President, and Jeff Mitchell as Chief Financial Officer
of the combined company.
“We believe this transaction represents a great investment
opportunity for Atlas shareholders at a very attractive valuation
and at an optimal time in the recovering business cycle,” stated
James N. Hauslein, Chairman and Chief Executive Officer of Atlas
Acquisition Holdings Corp. “Select Staffing is the second largest
privately owned staffing company in the United States and is
positioned to capitalize on the underlying industry trends toward
increasing temporary staffing penetration in the U.S., like Europe
has done for some time. Temporary staffing is one of the leading
indicators in an economic recovery. Under the guidance of a
seasoned management team with a proven track record of acquiring
and successfully integrating acquisitions, we are confident in
Select Staffing’s business model and ability to further expand
their leadership position.”
“This transformative transaction strengthens our balance sheet,
reinforces our business model, and raises our stature as a leading
industry consolidator,” commented D. Stephen Sorensen, Chairman and
Chief Executive Officer of Select Staffing. “Through both organic
growth and acquisitions, we have established a leading market
position that places us at the forefront of an industry poised for
growth and continued consolidation. More than ever, businesses are
seeking the flexibility, risk management, and talented employees we
provide.”
Gaurav Burman, President of Atlas Acquisition Holdings Corp.
added, “Select Staffing represents exactly the type of business the
SPAC structure was created for. We believe that Atlas’ cash coupled
with Select Staffing’s business gives Atlas shareholders an ideal
platform for future value creation.”
Paul J. Sorensen, President of Select Staffing added, “Being a
public company enables us to offer our employees increased
professional opportunities and gives us greater resources to
satisfy our customers’ needs. This is the next chapter in Select
Staffing’s growth story.”
Terms of the Proposed
Transaction
Under the terms of the merger agreement, Select Staffing
shareholders will receive approximately 24,700,000 shares of Atlas,
or 42.5% of the combined company and certain of Select Staffing
Second Lien holders will receive securities convertible into up to
13.4% of the combined company. Atlas founders will retire 1,000,000
shares for no consideration. All outstanding Atlas warrants will be
converted to 1,677,000 shares of common stock at closing.
Atlas common shares will remain outstanding. Post
closing, the combined company is expected to have a total of
approximately 58,200,000 shares outstanding. The percentages and
total share count assume no Atlas shareholder redemptions and full
Second Lien participation.
In addition to shares offered in the transaction, Select
Staffing shareholders will be entitled to receive a potential
earn-out payment of up to 6,000,000 shares based on both 2010
EBITDA and 2010 stock performance.
As part of the transaction, Select Staffing is expected to
retire approximately $200 million or more in total debt. This
includes retiring at least $92 million of $100 million Second Lien
debt with $25 million in cash and the issuance of up to 7.8 million
shares. In addition, the transaction will substantially pay down
senior debt, enabling Select Staffing to reduce ongoing cash
requirements and continue to grow through acquisition.
Consummation of the proposed transaction is subject to
shareholder approval of the merger agreement, warrant holder
approval of amendments, approval of pre- and post-closing charter
amendments, as well as other customary closing conditions.
Atlas Acquisition Holdings Corp. will file a proxy statement
with the U.S. Securities and Exchange Commission in connection with
a special meeting of its stockholders to seek approval for the
proposed transaction, as well as certain other matters in
connection with the proposed transaction. The proxy statement will
also be mailed to warrant holders of Atlas in connection with a
special meeting of its warrant holders to seek approval of an
amendment to the Warrant Agreement that govern the terms of the
warrants. Additional information regarding Atlas, Select Staffing,
the proposed transaction and related matters will be available on
Form 8-K as filed with the SEC.
About Atlas Acquisition
Holdings Corp.
Atlas is a special purpose acquisition corporation formed in
2008 by James Hauslein, Chairman and Chief Executive Officer, and
Gaurav Burman, President, for the purpose of effecting a business
combination. On January 30, 2008, Atlas completed its initial
public offering of 20,000,000 units for an offering price of $10.00
or an aggregate of $200,000,000. Each unit consists of one share of
common stock, par value $.001, and one warrant. Each warrant
entitles the holder to purchase one share of common stock at a
price of $7.00 commencing on the consummation of a business
combination. As of September 30, 2009, Atlas held approximately
$200,045,752 in a trust account, which will be released at the
consummation of the proposed transaction. For more information on
Atlas, please refer to the SEC filings.
About Select
Staffing
Select Staffing is a leading provider of temporary staffing
services in the United States and is the largest provider of
temporary staffing services in California. Through a network of
company-owned and franchise agent offices, Select Staffing offers a
wide range of temporary staffing solutions for over 200 job
classifications across a range of service categories. Select
Staffing provides its services in 45 states through 355 offices, of
which 202 are company-owned and 153 are franchise agent
offices.
Select Staffing has rapidly expanded its revenue and U.S. market
share through numerous acquisitions and organic growth. Select
Staffing has a proven track record of identifying and successfully
integrating acquisitions, winning new clients and retaining
existing clients. Select Staffing’s revenues have grown during the
last four years at a compounded annual rate of 37%, from $411
million in 2004 to over $1.4 billion in 2008.
Additional Information About
the Merger and Where to Find It
In connection with the proposed merger, Atlas will file with the
Securities and Exchange Commission (“SEC”) a proxy statement. Atlas
will mail the proxy statement to its stockholders. Atlas urges
investors and security holders to read the proxy statement
regarding the proposed merger when it becomes available because it
will contain important information. You may obtain copies of all
documents filed with the SEC regarding this transaction, free of
charge, at the SEC’s website (www.sec.gov).
Atlas and its directors, executive officers and certain other
members of management and employees may be soliciting proxies from
Atlas stockholders in favor of the merger. Information regarding
the persons who may, under the rules of the SEC, be deemed
participants in the solicitation of Atlas stockholders in
connection with the proposed merger will be set forth in the proxy
statement when it is filed with the SEC. You can find information
about Atlas’s executive officers and directors in its Reports on
Form 10-K and other documents that have previously been filed with
the SEC.
Forward-Looking
Statements
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
regarding Atlas and Select Staffing and the proposed transaction.
Forward-looking statements are statements that are not historical
facts. Such forward-looking statements, which are based upon the
current beliefs and expectations of the management of Atlas and
Select Staffing, are subject to risks and uncertainties, which
could cause actual results to differ materially from these
forward-looking statements. The following factors, among others,
could cause actual results to differ from those set forth in the
forward-looking statements: Atlas’ ability to complete a business
combination and those other risks and uncertainties detailed in
Atlas’ filings with the Securities and Exchange Commission. The
information set forth herein should be read in light of such risks.
Neither Atlas nor Select Staffing assumes any obligation to update
the information contained in this release.
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