January 9, 2013

MidOcean Acquires System One in LBO Deal

Earlier this week, MidOcean Partners announced that it had acquired All System Holdings (System One), a Pittsburgh-based provider of technical and engineering-related staffing solutions, in a leveraged buyout. In addition to its core capabilities on the technical and engineering side, over the last few years the company has grown its business to include legal staffing (through the acquisition of the Compliance Division of Randstad) as well as a proprietary VMS. System One is the sixth largest engineering staffing company and 42nd largest overall staffing company in the United States.

Prospect Capital provided approximately $32 million of senior debt to fund the acquisition. We estimate the total enterprise value of the deal at less than $130 million, representing  approximately 0.4x revenue.

The staffing industry continues to see significant interest from private equity firms. Other recent private equity related deals in the staffing space include Morgan Stanley’s majority investment in CreativeCircle, Weston Presidio’s growth equity investment in DISYS, The Gores Group’s acquisition of Glotel and Sverica’s investment in Bartech. We expect to see continued investment across the staffing sector as companies seek capital to execute on their organic and inorganic growth strategies.