HireRight agrees to takeover by US Investigations

Employment screening company HireRight Inc. has agreed to a $195 million acquisition by US Investigations Services LLC, a provider of security screenings to the federal government, according to a regulatory filing on Tuesday.

In the Securities and Exchange Commission filing, the companies said USIS will pay HireRight stockholders $15.60 per share in cash, which represents a 49 percent premium over HireRight's closing price of $10.47 on Monday. HireRight had 11.5 million shares outstanding as of May 1.

In morning trading, HireRight shares spiked $4.69, or 44.8 percent, to $15.16. HireRight has traded between $8 and $15.15 since the company's initial public offering priced at $15 in August 2007. The stock has suffered due to concerns about the U.S. labor market.

After the acquisition, HireRight will be combined with USIS's commercial services division. USIS also provides background investigations, employment and drug screening services, automotive insurance underwriting services, and national security solutions to government and corporate clients. The Falls Church, Va., company's controlling shareholder is Providence Equity Partners.

After the acquisition, USIS will serve over 27,000 customers.

"The combined company will have a greater reach than either company would have standing alone, and together we should be able to accelerate efforts to create valuable new products and services for the combined company's target markets," said HireRight Chief Executive Eric Boden.

The deal is expected to close in the third quarter, subject to approval by HireRight stockholders, regulatory clearance, and certain other customary closing conditions. The transaction is not subject to any financing conditions.

Credit Suisse is acting as HireRight's financial adviser. USIS and Providence Equity Partners are being advised by Lehman Brothers and Portico Capital Securities.