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What: Shares of staffing company On Assignment
So what: On Assignment announced it would buy Apex Systems for $600 million, including debt. Management expects the deal to add to earnings this year and help it reach a goal of $1 billion in sales.
Now what: Apex had about $700 million in revenue and $65 million in EBITDA in 2011, so it's not a bad price to pay in a growing market. This part of the industry continues to grow, and investors are betting that this type of consolidation will lead to more pricing power as well. This is an awfully big deal for On Assignment, but if the combined company continues to grow, it could pay off in spades.
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