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Administaff and Virtual Growth Announce Formal Strategic Alliance to Provide Integrated Web-Based Personnel Management and Accounting Services.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 11, 2000

Alliance includes $3MM Investment by Administaff, Targets Service

Delivery for Administaff's more than 3,200 SMB Clients

Virtual Growth, an outsourced Internet Business Service Provider for small and medium-sized businesses (SMBs), today announced a formal strategic alliance with Administaff, Inc. (NYSE: ASF), a leading Professional Employer Organization (PEO). The alliance, which includes a $3 million equity investment by Administaff, also involves joint sales and marketing initiatives as well as plans to eventually integrate the two product offerings. Administaff's SMB clients will be able to outsource, streamline and centralize their personnel management and accounting functions, removing the burden of building and maintaining both of these operations.

Virtual Growth will offer its Web-based accounting solution, Virtual Accountant(TM), to over 3,200 Administaff clients through coordination of Virtual Growth's sales force and Adminstaff's sales force. Virtual Accountant is Virtual Growth's new Web-based, enterprise-class accounting solution that combines an ASP delivery model with outsourced accounting services. This "Next Generation" ASP integrates financial transactions from multiple sources into a general ledger and allows SMBs to completely outsource their accounting functions to a team of trained accountants who actually do their bookkeeping.

Virtual Accountant will also be offered through Administaff's eCommerce portal, bizzport(SM). Bizzport is Administaff's business-to-business and business-to-consumer eCommerce portal that offers a broad range of products and services to clients and employees. Bizzport is accessible via Administaff's Web site at www.administaff.com.

Clients of both companies will not only benefit by outsourcing to best-in-class service providers, but by eventually having their PEO-related expenses automatically posted into their general ledger, increasing the accuracy and timeliness of their financial information.

"As a leader in outsourced personnel management services, Administaff is the ideal company to expand the integrated service offerings that Virtual Growth will launch in the coming year," said Stephen King, founder and CEO of Virtual Growth. "This alliance will help SMBs automate and integrate two key components of their back-office operations while removing the burden of building and maintaining accounting and human resource departments."

"Accounting is a time and resource-intensive job," commented Paul J. Sarvadi, President and CEO of Administaff. "We created this alliance because both Virtual Growth and Administaff are in the business of improving productivity and helping companies grow quickly by focusing on their core competencies and competing effectively in the new economy. Our equity position reflects our belief that Virtual Growth will be a leader in the Internet business services category."

About Virtual Growth

Virtual Growth's mission is to deliver automated and integrated business solutions for small and medium-sized companies so they can enhance productivity and concentrate on core competencies. Virtual Growth's first solution, Virtual Accountant(TM), combines an ASP delivery model with outsourced accounting services to provide a cost-effective, proactive accounting solution. The service features Web-based enterprise-class financial software and teams of trained accountants assigned to each client to remove the burden of building and maintaining an in-house accounting department. Founded in 1995, Virtual Growth is privately held and funded by Bessemer Venture Partners, Citigroup Investments Inc., a subsidiary of Citigroup Inc. (NYSE:C), StarVest Partners, Chelsea Capital Partners, and Administaff Inc. (NYSE: ASF).

For more information, please visit Virtual Growth at www.virtualgrowth.com.

About Administaff

Administaff is a leading provider of personnel management services for small and medium-sized businesses throughout the United States. The company's comprehensive Personnel Management System includes employment administration, benefits management, government compliance, recruiting and selection, employer liability management, training and development, performance management and owner support. Administaff ranks number 615 on the Fortune 1000 list and is included for the second consecutive year on Fortune magazine's list of "America's Most Admired Companies." The company also ranks number 83 on the InformationWeek 500 list of leading technology innovators. Administaff currently has 28 sales offices in 16 major markets. For additional information, visit the company's web site at www.administaff.com.

Administaff eCommerce Portal, bizzport

Administaff's business-to-business and business-to-consumer eCommerce portal represents a major element in the company's comprehensive eBusiness strategy. Designed for exclusive use by Administaff's clients and worksite employees, the portal leverages Administaff's buying power and business relationships to bring a broad range of products and services from best-of-class providers to the premium small business community represented by Administaff's client base. In addition to Virtual Growth, Administaff has alliances with leading companies such as American Express, AT&T, Aon Enterprise Insurance Services, Bank One, Dell, eProsper, Forrester Research, IBM, MobShop, Inc. and works.com.
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Publication:Business Wire
Geographic Code:1USA
Date:Jul 11, 2000
Words:741
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