FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities and Exchange Act of 1934
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Dated: November 14, 1996
Employee Solutions, Inc.
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(Exact name of registrant as specified in its charter)
Arizona 0-22600 86-0676898
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2929 East Camelback Road, Suite 220, Phoenix, Arizona 85016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 955-5556
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 14, 1996, effective as of November 1, 1996, Employee Solutions,
Inc. (the "Company") acquired operating control of substantially all of the
assets of the following companies: Diversified Resources, Inc.; Pay Sources,
Inc.; PermaStaff, Inc.; Staffing Alternatives, Inc.; and Uniserve South, Inc.
(together, the "McClary Companies"), and Elite Transportation Services, Inc.
(the "Trapp Company") (the McClary Companies and the Trapp Company are sometimes
referred to as the "McClary-Trapp Group"). The acquisition agreement provides
that the Company will acquire legal title to the assets on January 1, 1997 and
acquired effective control of the McClary-Trapp Group assets as of November 1,
1996 via an interim management agreement.
The McClary Companies are South Carolina-based professional employer
organizations ("PEO") specializing in the provision of PEO services to clients
primarily in manufacturing, light industrial and transportation industries in
the southeastern United States. The Trapp Company is an Alabama-based PEO
specializing in the provision of PEO services to clients in the transportation
industry. At November 1, 1996 the McClary-Trapp Group together leased
approximately 2,000 employees to approximately 125 clients in approximately 15
states.
The total consideration given by the Company was $10.7 million
consisting of $9.6 million in cash, and 53,000 shares of the Company's Common
Stock (which shares are unregistered, but subject to registration rights) valued
at $1.1 million. A portion of the cash was obtained under the Company's existing
bank revolving credit arrangements. The acquisition price was negotiated at
arm's length between representatives of the Company, the McClary Companies and
the Trapp Company, and is based upon a multiple of five times pre-tax earnings,
as defined.
Approximately one-half of the purchase price has been placed in escrow
to be released to the sellers in stages during a period of 15 months following
closing, subject to certain purchase price reductions in the event of attrition
within the acquired customer base.
In connection with the acquisition, the Company entered into three-year
employment agreements with the key executive officers of the acquired companies.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
1. Exhibits. See exhibit index attached hereto.
2. Financial Statements. Because the McClary-Trapp Group (even if
considered together) would not constitute a significant
subsidiary of the Company under Regulation S-X, historical
financial statements of the McClary Companies and the Trapp
Company, and pro forma financial statements of the Company,
are not required.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
EMPLOYEE SOLUTIONS, INC.
By:/s/ Marvin D. Brody
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Marvin D. Brody
Chief Executive Officer
Date: November 26, 1996
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EMPLOYEE SOLUTIONS, INC.
FORM 8-K
DATED NOVEMBER 14, 1996
EXHIBIT INDEX
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Exhibit No. Description Incorporated by
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2.1 Purchase Agreement between the Exhibit 10.1 to the
Company, the McClary-Trapp Company's Quarterly
Group of Companies, and the Report on Form 10-Q
shareholders of the for the quarter ended
McClary-Trapp Group of September 30, 1996
Companies
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