Westaff (NASDAQ:WSTF)
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Westaff, Inc. (NASDAQ:WSTF) a leading provider of staffing services,
announced today that it has entered into a definitive agreement to sell
its Australia and New Zealand subsidiaries to Humanis Blue Pty Ltd, an
Australian company and subsidiary of Humanis Group Limited, in a
transaction valued at approximately US $15 million, consisting of a
combination of cash and debt. Humanis is a Melbourne, Australia based
company involved in the accumulation of recruitment providers in select
verticals and Westaff’s Australia and New
Zealand businesses are its first acquisition.
Upon completion of the transaction, the divestiture would mark Westaff’s
exit from non-core international operations, and represent the
culmination of several strategic steps that Westaff has taken with the
objective of improving its business and its operations.
“This is an extremely positive step, and one
that would position Westaff to sharpen its focus on the strength of its
United States operations,” commented Westaff
CEO and Chairman Michael T. Willis. “In
addition, we expect that this sale would provide us with the opportunity
to re-invest in our core business and pursue our growth objectives.”
Upon completion of the sale, Westaff intends to focus on establishing
and executing a new strategy to leverage its core competencies,
experience, and market understanding. Westaff expects to announce these
new strategic goals and related operational milestones in the near
future upon completion of the sale.
Under the terms of the agreement, Humanis will purchase Westaff’s
Australia and New Zealand subsidiaries for approximately US $13.3
million in cash at closing and US $2.5 million in the form of a deferred
payment promissory note due one year after closing. Westaff expects to
receive net cash proceeds of approximately US $7.5 million following
payment of taxes, banking and legal fees and the repayment of certain
outstanding debts. The transaction is subject to customary closing
conditions and is expected to close on November 3, 2008. Approval by
Westaff’s shareholders is not a condition to
the closing of the sale.
About Westaff
Westaff provides staffing services and employment opportunities for
businesses in global markets. Westaff annually employs in excess of
125,000 people and services more than 20,000 client accounts from 204
offices located throughout the United States, Australia and New Zealand.
For more information, please visit Westaff’s
Web site at www.westaff.com.
This press release contains forward-looking statements within the
meaning of the U.S. securities laws. Forward-looking statements in this
release are generally identified by words such as "expects," "believes,"
"will," “would,”
"should" and similar expressions that are intended to identify
forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date hereof. All forward-looking statements are qualified in their
entirety by this cautionary statement. Forward-looking statements
contained herein include, but are not limited to, statements regarding
(i) Westaff's expectations regarding the closing of the sale; (ii)
Westaff's expectation that the sale would improve Westaff’s
operations; (iii) Westaff's expectation that the sale would complete
Westaff’s strategy of divesting foreign
operations and position Westaff to focus on growth in the United States;
(iv) Westaff’s expectation that the sale
would enable Westaff to focus on executing a new strategy and that
Westaff would be able to new strategic goals and related operational
milestones immediately upon completion of the sale; and (v) Westaff’s
expectation regarding the net cash proceeds to be received from the
sale. The forward-looking statements contained herein involve a number
of assumptions, risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by these
forward-looking statements. Many of these risks and uncertainties cannot
be controlled by Westaff. These risks and uncertainties include, but are
not limited to: the risk that the conditions to the closing of the sale
might not be satisfied and the sale might not close; an intensely priced
competitive market; Westaff's ability to continue to obtain a
forbearance or that such forbearance would be on terms acceptable to
Westaff; our significant working capital needs and our ability to borrow
to meet those needs; our ability to borrow under our credit facilities
and our compliance with their debt covenants; variability of the amount
of collateral that we are required to maintain to support our workers'
compensation obligation; the sufficiency of our workers' compensation
claims reserve; variability of employee-related costs, including
workers' compensation liabilities; possible adverse effects of
fluctuations in the general economy; our ability to collect on our
accounts receivable; risks related to franchise agent operations; risks
related to international operations and fluctuating exchange rates;
reliance on executive management and key personnel; our ability to
attract and retain the services of qualified temporary personnel; the
ability of our customers to terminate our service agreement on short
notice; variability of the cost of unemployment insurance for our
temporary employees; any difficulty with our information technology
system; government regulation; potential exposure to employment-related
claims; the volatility of Westaff's stock price; increased regulatory
compliance costs; and litigation and other claims. Additional
information concerning the risks and uncertainties listed above, and
other factors you may wish to consider, is contained in the Westaff's
filings with the Securities and Exchange Commission, including the
Westaff's most recent Annual Report on Form10-K for the year ended
November 3, 2007 and Quarterly Report on Form 10-Q for the quarterly
period ended July 12, 2008.
Forward-looking statements are based on the beliefs and assumptions
of the Westaff's management and on currently available information.
Westaff undertakes no responsibility to publicly update or revise any
forward-looking statement except as required by applicable laws and
regulations.