Oct. 29, 2009 (PR Newswire) --
IRVINE, Calif., Oct. 29 /PRNewswire-FirstCall/ -- Resources Connection, Inc., (Nasdaq: RECN), today announced the formation of a Corporate Advisory and Restructuring subsidiary through the acquisition of the business of Sitrick And Company, Inc., one of the nation's leading strategic communications firms and Brincko Associates, Inc., a widely-respected corporate advisory and restructuring firm.
The acquisitions, which include the purchase of certain assets of both Sitrick And Company and Brincko Associates, and the personal goodwill of Michael Sitrick, CEO of Sitrick and Company, will be made for aggregate initial consideration of $43.3 million, comprising $28.2 million in cash and approximately 810,000 shares of restricted stock which, for financial reporting purposes, will be valued at the closing price of Resources' stock on the date the transaction closes, plus an earn-out based on the achievement of certain adjusted earnings before interest, income taxes, depreciation and amortization ("EBITDA") levels over a period of four years from the date of closing. The transaction is subject to customary closing conditions, including the completion of the audited financial statements for Brincko Associates, and is expected to close within the next 30 days. The principal acquisition agreement provides that the employees of the new subsidiary would share in up to 20 percent of the earn-out based upon the achievement of certain growth targets.
Following the closing, this new Resources subsidiary will be called Sitrick Brincko Group, LLC. Michael Sitrick will be Chairman and CEO of the new subsidiary and will report directly to Donald B. Murray, Chairman and CEO of Resources. John Brincko will be President and COO of the new subsidiary.
Sitrick And Company, with offices in Los Angeles, New York, San Francisco and Miami, specializes in corporate, financial, transactional and crisis communications. It was founded in 1989. Headquartered in Southern California, Brincko Associates is an international management consulting firm established in 1979.
Mr. Murray said the transaction, which is expected to be immediately accretive, will make Resources a meaningful player in the corporate advisory and restructuring market.
"Strategically, the acquisition of the business of Sitrick And Company augments Resources' "first in" capabilities as corporate issues arise and require immediate communication strategy formulation and execution," Mr. Murray said. "In such situations, companies often require significant assistance to react proactively to the business issues at hand. Such matters include business and financial restructuring, dispute resolution assistance, interim senior-level management or forensic accounting assistance."
"Brincko Associates brings significant, added expertise in each of these areas to Resources. By combining the specialized skill sets of these two businesses with Resources' consultant capabilities, geographic footprint and client base, we believe we will greatly increase our ability to assist clients during challenging periods in a more cost effective manner than currently offered by traditional consulting firms," he said.
"All one has to do is to read the daily headlines to see why we are so excited about this acquisition," Mr. Murray said. "Despite predictions that the recession is over, the business landscape remains littered with troubled companies and indeed whole industries. The constricted financing environment over the past couple of years has further exacerbated these problems and deepened the pipeline of troubled companies. We believe this transaction provides significant opportunities for growth."
"The anticipated synergies between Sitrick, Brincko and Resources not only provide this vehicle for growth," he stated, "but what we all believe is a cost-effective means for companies undergoing change to work through their problems. Sitrick's and Brincko's ability to provide expert senior-level corporate advisory, turnaround and communications counsel is recognized nationwide. Resources, with over 2000 consultants and 82 locations throughout the world, provides the means to staff assignments with as many highly-qualified accounting, human resources and IT professionals as required, at a cost that is considerably less than comparable turnaround firms are charging."
Mr. Sitrick added, "We believe there is a paradigm shift occurring in the advisory and restructuring business due to the cash squeeze that companies in the current economic environment are experiencing.
