Kelly Services’ board of directors has authorized the sale of its staff leasing business to Oasis Outsourcing Holdings, Inc. In addition, the company has also announced that it had purchased an additional 1.6-percent interest in Tempstaff, the second largest staffing firm in the Japanese market, bringing its total investment to approximately 4.9%.
The sale of staff leasing will generate $6.5 million in cash and will result in a one-time, pretax gain of approximately $3.8 million. The transaction is anticipated to close in the fourth quarter of 2006.
The business unit is expected to report net revenues of approximately $33 million for the full year of 2006. The sale is not expected to have a material impact on 2007 earnings or cash flows.
"The sale of the staff leasing business unit is an important part of our strategy of reviewing our existing operations, selectively divesting non-core assets, and reinvesting the proceeds in strategic growth initiatives,” said Carl T. Camden, Kelly’s president and CEO. Although our staff leasing business is successful and profitable, we will concentrate our resources on growth opportunities more consistent with our large global customer strategy. We’re pleased that this transaction provides our staff leasing customers with access to a wide range of professional employer organization services through Oasis Outsourcing, a recognized leader in that industry."
The acquisition of the additional 1.6-percent interest in Tempstaff was made through open market purchases totaling approximately $16 million. The company said presently it has no intention of increasing its investment beyond the 4.9-percent threshold.
"Our additional investment in Tempstaff further strengthens our important strategic alliance with the second-largest staffing firm in the Japanese market and enhances our ability to serve global customers," added Camden.