POSITIVE OUTLOOK FOR
STAFFING INDUSTRY M&A IN 2006

HOUSTON, TX – April 4, 2006 – Growth Capital Partners reported today that 29 staffing transactions were announced in the first quarter of 2006. M&A activity across the industry has generally increased over the past two years, with professional staffing companies continuing to generate the most interest from buyers. Completed transaction totals should continue to increase in 2006, as improving operating performance and increasing buyer interest should enable more sellers to achieve their valuation goals in a transaction.

Professional staffing companies, including those in the IT services, engineering/technical, healthcare, accounting/finance and legal staffing industries, continue to be the most attractive targets for buyers as 79% of the announced transactions this quarter involved professional staffing firms. IT services companies, consisting of both IT staffing and IT solutions firms, saw the most M&A activity for the quarter with 9 announced transactions. On the commercial staffing side, deal flow is modestly improving with 6 transactions announced in the quarter.

“Many of the most aggressive buyers in today’s staffing M&A market are exclusively seeking specialty staffing businesses, and now is an ideal time for companies serving those segments to explore M&A alternatives,” commented John Niehaus, Director of Staffing Services and Human Capital Management for Growth Capital Partners. “Once these aggressive buyers fill out their specialty practices, especially in the fast growing areas of finance and accounting and legal staffing, it may become more difficult for sellers to achieve their valuation goals in a transaction. A very unique opportunity now exists for those professional staffing providers that can attract one of a handful of currently aggressive buyers.”

“Additionally, we continue to see strong interest from the private equity groups for companies with strong management teams and EBITDA of $4 million and above,” continued Mr. Niehaus. “Contacting these financial buyers should be an important component of the sale process for many staffing companies and it is becoming increasingly common to see these financial buyers outbid the strategic acquirers. This is another reason why conducting a full sale process, as opposed to speaking with just one or two individual buyers, is critical to attaining the best price and terms for your business.”

Among the notable deals announced in the first quarter of 2006, DIS Deutscher Industrie Service AG, a leading German professional staffing company, announced that it will be acquired by Adecco SA in a transaction valued at approximately $820 million; Pinkerton Computer Consultants, a Trevose, PA - based IT staffing company with approximately $96 million of revenue was acquired by Kforce for $60 million; Nautic Partners acquired Oasis Outsourcing, a PEO, from H.I.G. Capital for an undisclosed amount; and Randstad Holding NV acquired Bindan GmbH and Teccon GmbH, the oldest staffing company in Germany having annual sales of approximately $179 million.

Growth Capital Partners, L.P. is a premier, client-focused investment and merchant bank serving both private and public middle-market companies, with a specialty practice devoted to the Staffing industry. Since the firm's inception in 1992, GCP has completed in excess of 200 transactions, raised more than $1 billion of institutional capital (through private placements of equity, subordinated, and senior debt), and completed merger and acquisition transactions with an aggregate value in excess of $2.0 billion.

For more information on Growth Capital’s services, including its specialty practice for Staffing, IT Services and HRO companies, please contact John Niehaus at jniehaus@growth-capital.com or visit our website at www.growth-capital.com.

Source:  Growth Capital Partners, L.P. member FINRA – SIPC

Growth Capital Partners, L.P. Securities offered through GCP Securities, Inc. member FINRA – SIPC

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