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EXHIBIT 99.1
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Interim Services Inc. and Xxxxxxx Corporation to Merge;
Transaction to create $4 billion leader in staffing, human capital management
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Ft. Lauderdale, FL and Atlanta, GA, March 25, 1999 --- Interim Services Inc.
(NYSE:IS) and Xxxxxxx Corporation (NYSE:NRL), two of the world's leading
workforce management companies, today announced a definitive agreement for
Xxxxxxx to merge with Interim.
Shareholders of Xxxxxxx will receive 0.9 shares of Interim stock for each
Xxxxxxx share on a tax-deferred basis. Xxxxxxx shareholders electing to
receive cash in lieu of stock will have the right to do so within certain
limitations and on a taxable basis. The Interim stock will constitute a
maximum of 90 percent of the total consideration. Based on yesterday's
closing price and estimated debt to be assumed, the transaction is valued at
approximately $553 million. The transaction is expected to conclude during
the second quarter 1999 subject to regulatory and shareholder approval. The
transaction, which will be accounted for as a purchase and at the maximum
stock component, is expected to be accretive to Interim 1999 diluted
earnings per share by about $0.01. This accretion estimate does not include
potential operating synergies, but does take into consideration a reduction
in net earnings expectations for Xxxxxxx'x 1999 fiscal year to approximately
$1.39 to $1.42 per share. The foregoing estimates also exclude Xxxxxxx'x Y2K
operating charges during the last six months of 1999, which are projected to
be $ 0.10 per diluted Interim share. Accretion per diluted Interim share for
the year 2000, including currently estimated operating synergies, is
expected to be $0.10 to $0.20.
"The merger with Xxxxxxx brings the development of our portfolio of services in
the area of human capital management to near completion. The transaction
significantly increases the scope of our information technology, accounting and
commercial staffing business units, while adding two new services to the Interim
portfolio -- outsourcing and call center services," said Interim Chairman,
President and CEO Xxx Xxxxx. "In addition, we have adequately penetrated the
North American market through the merger with Xxxxxxx and expect this
transaction to mark the completion of large acquisitions in North America."
"Our organization has always had the highest level of respect for Xxxxxxx as a
competitor. Interim and Xxxxxxx adhere to a similar sales strategy that focuses
on value-added services, as opposed to price discounting. In addition, both
Interim and Xxxxxxx have evolved to offer clients a variety of services that aid
in the strategic management of human capital. Because of the similarity in sales
philosophy and the complementary nature of the two companies' field locations
and service offerings, we believe integration will be a smooth and successful
process."
Xxxxx added, "We look forward to the geographical coverage that will make us a
powerful force in key areas, such as Chicago, Atlanta, Northern California, and
the Northeast, as well as the addition of Xxxxxxx'x global account team, which
focuses on high-level integrated sales. We stand to benefit from the fact that
while Interim has targeted Fortune 1000 clients, Xxxxxxx has focused more on
Fortune 100 clients."
Xxxx Xxxxxx, Xxxxxxx chairman and chief executive officer, said "Xxxxxxx and
Interim share a similar vision and have pursued marketplace positioning as
strategic workforce management and human capital management companies,
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respectively. The combined companies will have enhanced capabilities to serve
clients on a global basis with the widest range of services available in the
industry."
Positive Service Mix Shift
The merger with Xxxxxxx will result in significant changes to the Interim
service mix, reflecting a continuing emphasis on professional and
managed\services. Combined for the calendar year 1999, service mix for the
combined companies is expected to be as follows:
* Managed services will increase from approximately 16% to nearly 26% of
revenues.
* Permanent placement business shifts from 13% to 8% of revenues.
* Flexible staffing will remain at 53% of revenues.
* Consulting revenues will decline from approximately 16% to 13% of
revenues.
Assuming completion of the merger, Interim estimates the combined companies'
1999 revenues will be $4 billion. Based upon 1998 information, Interim believes
the combined companies' industry ranking would be 3rd largest in the US in terms
of revenue and 4th largest worldwide in terms of EBITDA (earnings before
interest, taxes, depreciation and amortization).
Service lines new to Interim
Combining the companies' revenues for the calendar year 1999, the transaction is
estimated to add:
* More than $250 million in outsourcing revenues - a predominantly new area
of service for Interim - which would increase the Managed Staffing
revenues of the combined companies to approximately $1 billion. Xxxxxxx'x
outsourcing business assumes responsibility for the management of
functions either at a client's site or at an independent service center.
Examples include administrative support centers, workforce selection,
sales resource and call centers.
* Significant expertise in call center operations, which is a natural and
strategic expansion of Interim's help desk business. Xxxxxxx'x call
centers manage inbound communication such as reservations, customer
service requests and order processing.
Expansion of existing Interim service lines
Combining the companies' revenues for 1999, the transaction is estimated to
add:
* Information technology (IT) revenues of $250 million, increasing total IT
revenues for Interim to approximately $1 billion. The combined companies'
comprehensive IT service offerings would position Interim as a clear
global leader within this sector. Xxxxxxx'x' complementary IT practice
areas include Enterprise Resource Product (ERP) implementation and
emerging technologies, as well as staffing, consulting and educational
services.
* More than $40 million in estimated accounting revenues, which
would extend Interim North American accounting revenues beyond the $100
million mark in 1999. Combined with Michael Page, Interim estimates total
worldwide accounting/finance revenues would exceed $600 million in 1999.
* Approximately $800 million in commercial staffing revenues, which would
shift the Interim commercial staffing business mix to 60% clerical and 40%
light industrial. Combined company commercial staffing revenues are
estimated at $1.8 billion in 1999. In addition, management believes that
the combined companies' success in the On-Premise service line would
create a clear and powerful North American leader in this area.
* Interim's successful internal technology strategies are expected to
provide operating efficiencies and solutions that complement Xxxxxxx'x
internal technology initiatives.
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Management Change
Xxxx Xxxxxx, chairman and CEO, will remain with the combined companies for a
transition period and play a valuable role in the integration process and
transition of leadership to Xxxxx. Upon completion of the transaction, Norrell
founder Xxx X. Xxxxxxx, with an estimated 10% of outstanding Interim shares,
will be one of Interim's largest individual shareholders and a Director of
Interim.
This news release is intended to take advantage of the "safe harbor" provided by
the Private Securities Litigation Reform Act of 1995 with respect to such
forward-looking statements and contains certain forward-looking statements and
information that involve risks and uncertainties. Where used in this release,
the words "anticipate," "believe," "estimate," "expect," and similar expressions
are intended to identify forward-looking statements. The actual results of the
merged companies could differ materially from the results anticipated by such
forward looking statements. Among the factors that may have a direct bearing on
the companies' results are the companies' ability to attain expected synergies,
the ability to integrate Xxxxxxx'x operations, fluctuations in economic
conditions in the companies' markets, the degree and nature of competition,
price competition, the companies' ability to recruit and place employees, their
ability to attract new clients and retain key management, and other factors
discussed in the reports filed by Interim and Xxxxxxx with the securities and
exchange commission.
About Interim Services Inc.
Interim Services Inc., headquartered in Ft. Xxxxxxxxxx, FL, is a leader in the
assessment, measurement and deployment of human capital. Through a network of
nearly 880 offices throughout North America, Europe and Australia/Asia, the
Company generated revenues of approximately $1.9 billion in 1998. It provides
flexible staffing, consulting, search/recruitment and managed services in
accounting, information technology, legal, human resources, sales and marketing;
as well as administrative, clerical and light industrial. More information is
available on the Interim website at xxx.xxxxxxx.xxx.
About Xxxxxxx Corporation
Xxxxxxx Corporation is a strategic workforce management company that
integrates client business strategies with workforce strategies to
strengthen organizational effectiveness and flexibility. With 1999
annualized revenues of approximately $1.4 billion, the company provides its
services to an extensive client base through a multinational network of
company-owned, franchised and outsourcing locations. Xxxxxxx'x web site is
xxxx://xx.xxxxxxx.xxx.
