ROBUST M&A MARKET CONTINUES FOR PROFESSIONAL STAFFING FIRMS

Growth Capital Partners Reports 86 Transactions in the First Six Months of 2007

HOUSTON, TX, July 9, 2007 – Growth Capital Partners reported today that 51 staffing businesses were sold or merged in the second quarter of 2007, the highest quarterly total announced by buyers in the past eight years.  For the first six months of 2007, 86 transactions have been reported, which is also the highest six month total since 1999.  We continue to observe an increasing number of high quality professional staffing companies taking advantage of this very favorable staffing M&A market.  Conditions should remain conducive for quality transactions to be completed throughout the remainder of the year, as both strategic corporate buyers and private equity groups continue to be active suitors for fast-growing, profitable, scalable and well-managed professional staffing businesses.

As has been the trend for several years, pure-play professional staffing companies continue to be the most attractive targets for today’s staffing acquirers as 80.4% of the announced transactions in the first six months of 2007 involved these specialty staffing firms.  Not only are more transactions being completed in the professional and niche staffing sectors, but the transaction multiples being paid by buyers continue to be considerably higher, especially for established companies within the accounting/finance or legal staffing sectors.  Likewise, fast-growing IT staffing and healthcare staffing companies continue to generate substantial buyer interest and multiple offers as 14 IT staffing and 12 healthcare staffing transactions were announced in the first half of 2007.  Finally, M&A activity for commercial staffing companies remains more targeted, with interest strongest for companies having annual revenue above $30 million, as 17 commercial staffing deals were announced in the first half of 2007.

“Buyers in today’s staffing M&A market continue to be focused predominately on high-growth, pure-play professional staffing businesses,” commented John Niehaus, Director of Staffing Services and Human Capital Management for Growth Capital Partners.  “As there remains a shortage of quality mid-sized and large specialty staffing firms willing to seriously entertain acquisition proposals, these businesses typically generate premium valuations when they do invite offers.”

“For any owner considering a transaction during this economic cycle, now is as good as it gets regarding the valuations, terms and transaction options available,” continued Mr. Niehaus.  “We expect staffing M&A activity to be very robust throughout the remainder of 2007 and for many noteworthy staffing businesses to announce transactions later this year.”

Among the notable deals announced in the second quarter of 2007, Koosharem Corporation, an affiliate of privately held SelectRemedy, acquired Ablest, a $140 million publicly traded provider of commercial staffing services; Resulte' Universal, a Dallas-based provider of IT staffing and F&A staffing services, was acquired by Spherion Corp.; Insight Global, a fast-growing Atlanta-based IT staffing company, was acquired by H.I.G. Capital, a Miami based private equity firm; Tuja Group, a leading German staffing firm with revenue of $870 million, was acquired by Adecco SA; and InteliStaf Holdings, one of the largest per diem nurse staffing companies in the nation, announced that it had been acquired by Medical Staffing Network for $92 million in cash.

About Growth Capital Partners, L.P.
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 $3.0 billion. 

For more information on Growth Capital Partners’ services, including its specialty practice for Staffing, IT Services and HRO companies, please contact:

Growth Capital Partners, L.P.
John Niehaus
281-445-6611
jniehaus@growth-capital.com

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