Acquisition Activity to Improve in 2003 as Staffing Industry Growth Returns; De Bellas & Co. Reports 142 Transactions During 2002.

Business Editors

HOUSTON--(BUSINESS WIRE)--Jan. 13, 2003

Statistics compiled by De Bellas & Co., a leading specialty investment banking firm, indicate that 39 staffing related businesses were sold or merged in the fourth quarter of 2002. While M&A activity in the staffing industry was modest in 2002, the 142 deals reported was a vast improvement over the 74 deals announced in 2001, yet far less than the 440 deals completed at the peak of staffing M&A activity in 1998. Firms providing specialty staffing services continued to be the most attractive in the industry, with healthcare staffing deals drawing the most buyer interest.

"2002 was a year where many previously active buyers focused on improving their existing operations and trimming expenses, rather than seeking outside growth opportunities," commented John Niehaus, a managing director of De Bellas & Co. "The notable exception was in the healthcare staffing niche, where the success of nurse staffing companies like AMN Healthcare (NYSE:AHS), Cross Country (Nasdaq:CCRN) and Medical Staffing Network (NYSE:MRN) created substantial buyer interest. However, even valuations in that sector retreated to more sustainable levels by year-end."

"We expect that in 2003 healthcare staffing will continue to flourish and that modest growth will return to the traditional staffing sector," continued Mr. Niehaus. "Buyer interest should improve as the year progresses and those companies with strong gross margins, sustainable profits, a diversified client list, experienced continuing management, and the necessary infrastructure in place for continued revenue growth will be attractive acquisition targets."

The top five public staffing buyers during 2002 accounted for 23% of all announced transactions. These buyers included ATC Healthcare; CGI Group (NYSE:GIB); Vedior NV; Medical Staffing Network; and Adecco SA (NYSE:ADO). Private buyers decreased their acquisition activity as compared to their public counterparts, accounting for 39% of all staffing industry transactions announced in 2002. These private buyers include both strategic acquirers with access to capital and the private equity groups.

De Bellas & Co. monitors nationwide consolidation activity to support its investment banking specialty as an advisor in all facets of M&A for its staffing services clients. For more information about De Bellas & Co. and a complete summary of recent staffing M&A activity, please visit our Web site at www.debellas.com.