Kforce Enters Into Agreement to Sell its Federal Government Solutions Business
TAMPA, FL, March 1, 2019 – Kforce Inc. (Nasdaq: KFRC), a provider of professional staffing services and solutions, entered into a Stock Purchase Agreement with ManTech International Corporation (ManTech), dated February 28, 2019, to sell Kforce Government Solutions, Inc. (KGS), our federal government solutions business, for an aggregate cash purchase price of $115.0 million. The transaction is expected to close by March 31, 2019, and is subject to customary closing conditions and the receipt of necessary regulatory approvals. The operating results of our federal government solutions business is expected to be reported as a discontinued operation in the quarter that this transaction closes. While this transaction does not include TraumaFX®, our federal government product business, we are exploring strategic alternatives for that business.
David L. Dunkel, Chairman and Chief Executive Officer commented, “Our federal government solutions business has been a meaningful part of our business since our initial government acquisition in 2006. I am immensely proud of the success that our KGS management team has had in growing and positioning this business for continued future success despite the competitive challenges it has faced, given its scale. We are excited for our KGS management team and associates to join forces with ManTech, which we expect will enhance KGS's competitive positioning and leverage its deep and long-standing customer relationships to drive further growth. We firmly believe in the strong secular drivers within the commercial technology space and, with this divestiture, virtually all of our revenues are derived from domestic professional and technical staffing services and solutions.”
David M. Kelly, Chief Financial Officer commented, “This is an important step to further focus our efforts in our core Technology and Finance and Accounting businesses. Due to the efficient structuring of this transaction, we expect to generate net proceeds after taxes and transaction costs of at least $90.0 million, which we anticipate using primarily for share repurchases. We expect that these anticipated repurchases and the improved profitability from a more simplified business model will result in the divestiture of KGS being EPS neutral or better on an annualized basis. We further expect our strong cash flows and the availability under our credit facility will position us well to look at strategic acquisitions, ventures and partnerships to enhance our focused footprint.”
KippsDeSanto & Co. served as the exclusive financial advisor to Kforce in this transaction.
Conference Call and Annual Meeting
On March 1, 2019, Kforce will host a conference call at 8:30 a.m. E.T. to discuss our views of this transaction. The dial-in number is (877) 344-3890 and the conference passcode is Kforce. The replay of the call will be available from 11:30 a.m. E.T., Friday March 1, 2019 until March 8, 2019 by dialing (855) 859-2056, passcode 2468602.
The Company intends to reference an investor relations presentation during the Company's conference call. A copy of this presentation and the webcast can be accessed at http://investor.kforce.com/investor-relations/events-and-presentations.
Kforce Inc. (the "Firm") is a professional staffing services and solutions firm that specializes in the areas of Technology and Finance & Accounting. Each year, our network of over 50 offices and two national recruiting centers provides opportunities for 36,000 highly skilled professionals who work with over 4,000 clients, including 70% of the Fortune 100. At Kforce, our promise is to deliver great results through strategic partnership and knowledge sharing. For more information, please visit our web site at http://www.kforce.com.
Michael R. Blackman, Chief Corporate Development Officer