Goldman Sachs last week launched syndication of $300 million of funding for Select Personnel Services' acquisition of RemedyTemp. The credit consists of a five-year, $85 million revolver and a six-year, $215 million first-lien term loan "B." Pricing is LIBOR plus 3% on both tranches. The Bank of the West is the co-syndication agent.
Select Personnel Services agreed to acquire RemedyTemp, an Aliso Viejo, Calif.-based staffing company, for about $169 million on May 11. The acquisition will be financed by the term loan, about $24 million of borrowings under the revolver and about $27.9 million of unrestricted cash on hand, according to Moody's Investors Service. The ratings agency assigned a B2 rating to the revolver and term loan of Koosharem, the holding company that owns Select. There is about 3.5 times leverage, including all synergies.
According to a filing with the Securities and Exchange Commission, in early 2005, D. Stephen Sorensen, president and ceo of Select, approached Greg Palmer, president and ceo of Remedy, to discuss their businesses and possible advantages of a combination. The two men met and spoke during September and on Oct. 11 an offer of between $13.20 to $14.30 a share was made. Over the next few months the parties continued to talk and in early March, after a revised financial forecast for Remedy, an offer of $16.33 was put on the table. On March 24, the offer was upped to $17 a share and an exclusivity agreement was signed April 10.
Goldman also acted as financial advisor to Select and Skadden, Arps, Slate, Meagher & Flom acted as its legal counsel. Robert W. Baird & Co. served as Remedy's financial advisor and O'Melveny & Meyers as its legal counsel for the acquisition. A Select spokeswoman declined comment. Monty Houdeshell, senior v.p. and chief adminsitration officer at Remedy, referred questions to the SEC filing.
Select also recently acquired a handful of other companies. It took over Staffing Services of Michigan and Progressive Personnel Services, also based in Michigan, in May. It acquired Inland Empire's Privilege Staffing, based in Southern California, in September (CIN, 5/19).