STAFFING M&A ACTIVITY FLOURISHES IN 2007

Growth Capital Partners Reports 150 Transactions in 2007

HOUSTON, TX, January 3, 2008 – Growth Capital Partners reported today that 150 staffing transactions were announced in 2007 by 105 different buyers, the highest number of staffing deals completed since 2004 and the highest number of buyers making a staffing acquisition since 1999. The number of reported transactions across the staffing industry surged in the second quarter of 2007 and remained slightly above historically normative levels throughout the remainder of the year, with 35, 51, 31 and 33 transactions announced in the four quarters of 2007, respectively. Transaction activity is likely to remain robust in 2008, especially within the professional staffing segments, as strategic buyers continue to actively pursue businesses that complement their existing services, customers or geographic reach and private equity groups continue to invest in scalable staffing platforms.

Professional staffing companies continue to see the broadest interest from buyers and account for the vast majority of M&A activity, as 78% of the announced transactions in 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 top-performing companies within the accounting/finance or legal staffing sectors. Likewise, fast-growing healthcare and IT staffing companies continue to generate substantial buyer interest as 24 IT staffing and 22 healthcare staffing transactions were announced in 2007. Finally, M&A activity for commercial staffing businesses continues to modestly improve, with 33 deals announced in 2007, the highest total since 2000. In the commercial staffing sector, valuation multiples are strongest for fast growing companies having strong succession management and above-market gross and EBITDA margins.

“Deal activity in the staffing industry flourished in 2007, as strong operating results for many private companies coupled with an increasingly uncertain economic picture led more potential sellers to explore the M&A market and take advantage of the current widespread buyer interest,” commented John Niehaus, Director of Staffing M&A Services for Growth Capital Partners. “However, this surge in seller interest has allowed staffing buyers to become very selective in choosing which deals to pursue, with larger companies and businesses having a track record of solid growth, strong gross margins, diversified customer bases and deep management teams faring best in regards to achieving premium valuation pricing.”

Among the notable deals announced in the fourth quarter of 2007, Tandem Staffing Solutions, a leading provider of light industrial, logistics and manufacturing staffing services, was acquired by Select Staffing, a division of The Select Family of Staffing Companies; Technisource, Inc., an IT staffing portfolio company of Charlesbank Capital Partners, was acquired by Spherion Corp. as Spherion continues to shift its mix of business towards higher margin professional staffing services; Randstad Holdings NV and Vedior NV announced that they have reached a merger agreement which will lead to the creation of the world’s second largest staffing company; PlaneTechs, LLC, a Chicago based provider of aircraft maintenance personnel, was acquired by Labor Ready, Inc. for $50 million; and CBS Personnel Holdings, Inc. announced that it plans to acquire Staffmark Investment LLC, a national provider of light industrial, administrative and transportation staffing.

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 M&A practice for Staffing, IT Consulting 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 NASD – SIPC

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