INTERNATIONAL ALLIANCE SERVICES INC, S-4, 1997-11-14

INTERNATIONAL ALLIANCE SERVICES INC
S-4, 1997-11-14
BUSINESS SERVICES, NEC

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<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 14, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
INTERNATIONAL ALLIANCE SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 7389 22-2769024
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation Industrial Classification Identification
or Organization) Code Number) Number)

10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(216) 447-9000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)

-------------------------

GREGORY J. SKODA
CHIEF FINANCIAL OFFICER
AND EXECUTIVE VICE PRESIDENT
INTERNATIONAL ALLIANCE SERVICES, INC.
10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(216) 447-9000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)

------------------------

With copy to:

SETH R. MOLAY, P.C.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
1700 PACIFIC AVENUE, SUITE 4100
DALLAS, TEXAS 75201
(214) 969-2800

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]
If any of the securities being registered on this form are to be
offered in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

------------------------

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>

PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(1) OFFERING PRICE(1) FEE(1)
===================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share .................. 7,729,468 $ 12.9375 $100,000,000 $ 30,303
===================================================================================================================
</TABLE>

(1) Pursuant to Rule 457(c), the registration fee is calculated based on
the average of the high and low prices for the Common Stock, as
reported on The Nasdaq National Market on November 11, 1997.
-------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

================================================================================
<PAGE> 2

SUBJECT TO COMPLETION, DATED NOVEMBER 14, 1997

PROSPECTUS
, 1997

7,729,468 Shares

INTERNATIONAL ALLIANCE SERVICES, INC.

Common Stock

This Prospectus relates to an aggregate of 7,729,468 shares (the
"Shares") of common stock, par value $.01 per share ("Common Stock"), of
International Alliance Services, Inc., a Delaware corporation (the "Company" or
"IASI"), which may be issued from time to time in the future by the Company on
the completion of acquisitions of assets, businesses or securities, or the
conversion of or payment of interest on convertible notes or debentures issued
in connection with such acquisitions of other businesses or properties.

It is expected that the terms of acquisitions involving the issuance of
the shares of Common Stock covered by this Prospectus will be determined by
direct negotiations with the owners or controlling persons of the assets,
businesses or securities to be acquired, and that the shares of Common Stock
issued will be valued at prices reasonably related to the market price of the
Common Stock either at the time an agreement is entered into concerning the
terms of the acquisition or at or about the time the shares are delivered. No
underwriting discounts or commissions will be paid, although finder's fees may
be paid in connection with certain acquisitions. Any person receiving such fees
may be deemed to be an "underwriter" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and any profit on the resale of shares
of Common Stock purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act.

The Common Stock is quoted on The Nasdaq National Market under the
symbol "IASI." On November 11, 1997, the last reported sales price for the
Common Stock as reported on The Nasdaq National Market was $13.00 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information included or incorporated by reference in this Prospectus, including
the Selected Consolidated Financial Data, the Company's Consolidated Financial
Statements and notes thereto.

IASI is a leading provider of outsourced business services to small and
medium sized companies throughout the United States. The Company provides
integrated services in the following areas: accounting systems, advisory and
tax; employee benefits design and administration; human resources; information
technology systems; payroll; specialty insurance; valuation; and workers'
compensation. These services are provided through a network of 60 Company
offices in 25 states, as well as through its subsidiary Comprehensive Business
Services ("Comprehensive"), a franchisor of accounting services with 250
franchisee offices located in 42 states. As of October 31, 1997, the Company
served approximately 50,000 clients, of which approximately 24,000 are served
through the Comprehensive franchisee network. Management estimates that its
clients employ over 800,000 employees, including 24,000 employed by clients of
the Comprehensive franchise network.

The Company's clients typically have fewer than 500 employees, and
prefer to focus their scarce resources on operational competencies while
allowing IASI to provide non-core administrative functions. In many instances,
outsourcing administrative functions allows clients to enhance productivity,
reduce costs, and improve service, quality and efficiency. Depending on a
client's size and capabilities, it may choose to utilize all or a portion of the
Company's broad array of services, which it typically accesses through a single
Company representative.

Pursuant to a strategic redirection of the Company initiated in November 1996,
the Company began its acquisition program to expand its operations rapidly in
the outsourced business services industry from its existing insurance platform.
From November 1, 1996 through September 30, 1997, the Company acquired the
businesses of 23 companies representing over $90 million in revenues. The
Company's acquisition program typically focuses on (i) market entry
acquisitions in which the Company establishes a significant presence in a city
or (ii) follow-on acquisitions of additional service providers in areas where
the Company's presence is established, increasing the number of clients served
and services offered in such markets. The Company seeks to acquire profitable,
well-run companies and to continue to employ their existing management teams,
providing them with incentive by utilizing a large proportion of restricted
IASI Common Stock as consideration for the acquisitions. The Company believes
that substantial additional acquisition opportunities exist throughout the
United States for several reasons, including the highly fragmented nature of
the industry, the advantages of economies of scale, and the desire of many
long-time owners for liquidity. The Company has completed from October 1, 1997
through November 3, 1997, or has publicly announced as pending an
additional 15 acquisitions representing over $40 million in revenues.

The outsourced business services industry in which the Company
currently operates is highly fragmented with approximately 600,000 outsourcing
establishments collectively generating approximately $300 billion in annual
revenue and has grown at a compound annual rate in excess of 9% since 1992. The
Company believes that this growth reflects the following trends: (i) more
companies are now utilizing outsourced business services, (ii) companies that
have traditionally used a limited amount of outsourced business services are now
utilizing a broader array of such services, and (iii) the number of small and
medium sized businesses in the United States continues to grow.

The Company's goal is to be the nation's premier provider of outsourced
business services to small and medium sized companies. The Company's strategies
to achieve this goal include: (i) continuing to provide clients with a broad
range of high quality services, (ii) continuing to expand locally through
internal growth by increasing the number of clients it serves and increasing the
number of services it provides to existing clients, and (iii) continuing to
expand nationally through an aggressive acquisition program.

The Company is in the process of changing its name to "Century Business
Services, Inc." The Company's principal executive offices are located at 10055
Sweet Valley Drive, Valley View, Ohio 44125, and its telephone number is (216)
447-9000.

<PAGE> 4

RISK FACTORS

Prospective purchasers of the Shares should carefully evaluate all of
the information contained and incorporated by reference in this Prospectus and
any accompanying Prospectus Supplement and, in particular, the following before
making an investment in the Shares.

ACQUISITION STRATEGY RISKS

The Company intends to continue to grow significantly through the
acquisition of additional strategic and complementary businesses. However, there
can be no assurance that the Company will be able to identify appropriate
acquisition candidates or, to the extent identified, acquire such additional
businesses. In addition, the Company expects to face competition for acquisition
candidates, which may limit the number of appropriate acquisition opportunities
and may lead to higher acquisition prices. Furthermore, acquisitions involve a
number of special risks, including possible adverse effects on the Company's
operating results, diversion of management's attention, failure to retain key
personnel of the acquired business and risks associated with unanticipated
events or liabilities, some or all of which could have a material adverse effect
on the Company's business, financial condition and results of operations. As a
result, there can be no assurance that businesses acquired in the future will
achieve anticipated revenues and earnings. See "Business-Strategy" and
"-Acquisition Program."

FINANCING OF ACQUISITIONS

The timing, size and success of the Company's acquisition efforts and
the associated capital commitments cannot be readily predicted. The Company
currently intends to finance future acquisitions by using shares of its Common
Stock for a significant portion of the consideration to be paid. In the event
that the Common Stock does not maintain a sufficient market value, or potential
acquisition candidates are otherwise unwilling to accept Common Stock as part of
the consideration for the sale of their businesses, the Company may be required
to utilize more of its cash resources, if available, in order to maintain its
acquisition program. If the Company does not have sufficient cash resources, its
growth could be limited unless it is able to obtain additional capital through
debt or equity financing. The Company has established a bank line of credit and
intends to maintain a universal shelf registration to fund its working capital
and acquisition needs; however, there can be no assurance that the Company will
be able to maintain the line of credit, access the public securities markets or
obtain other financing for its acquisition program on terms that the Company
deems acceptable. See "Management's Discussion and Analysis of Results of
Operations - Liquidity and Capital Resources."

ABILITY TO MANAGE GROWTH

The Company's business has grown significantly in size and complexity
over the past year, placing significant demands on the Company's management,
systems, internal controls, and financial and physical resources. In order to
meet such demands, the Company intends to continue to hire new employees and
invest in new equipment and make other capital expenditures. In addition, the
Company expects that it will need to further develop its financial and
managerial controls and reporting systems and procedures to accommodate any
future growth. Failure to expand any of the foregoing areas in an efficient
manner could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company is currently in the process of
integrating recent acquisitions with the Company's business and, in doing so,
will need to manage various businesses and their employees in geographically
diverse areas. There can be no assurance that the Company can successfully
integrate any acquired business into the Company without substantial costs,
delays or other operational or

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<PAGE> 5

financial problems. Moreover, any inability to manage growth effectively could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Management's Discussion and Analysis of Results
of Operations" and "Management."

RISKS RELATED TO INTANGIBLE ASSETS

Recent acquisitions have resulted in significant increases in goodwill
and other intangible assets, and the Company anticipates that such increases
will continue as a result of future acquisitions. Net identifiable intangible
assets, which include customer lists, employee lists and covenants not to
compete, acquired in the acquisitions were approximately $1.2 million at
September 30, 1997, representing less than 1% of the Company's total assets. Net
identifiable intangible assets are recorded at fair value on the date of
acquisition and are being amortized over periods ranging from three to 10 years.
Goodwill, which relates to the excess of cost over the fair value of net assets
of businesses acquired, was approximately $55 million at September 30, 1997,
representing approximately 23% of the Company's total assets. The Company
amortizes goodwill on a straight line basis for periods not exceeding 30 years.
There can be no assurance that the value of intangible assets will ever be
realized by the Company. On an ongoing basis, the Company makes an evaluation of
whether events and circumstances indicate that all or a portion of the carrying
value of intangible assets may no longer be recoverable, in which case an
additional charge to earnings may be necessary. Although at September 30, 1997
the net unamortized balance of intangible assets is not considered to be
impaired, any future determination requiring the write-off of a significant
portion of unamortized intangible assets could have a material adverse effect on
the Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Results of Operations."

RISKS ASSOCIATED WITH PROFESSIONAL SERVICE PROVIDERS

The Company's employee benefits and pension administration and tax
services are subject to various risks resulting from errors and omissions in
processing and filing benefit and pension plan forms and tax returns in
accordance with governmental regulations and the respective plans. The Company
processes data received from employees and employers and may be subject to
penalties for any late or misfiled plan forms or tax returns. There can be no
assurance the Company's insurance for such penalties will be adequate. In
addition, failure to properly file plan forms or tax returns could have a
material adverse effect on the Company's reputation and adversely affect its
relationships with existing clients and its ability to gain new clients. The
Company's employee benefits and pension administration and tax services are also
dependent upon government regulations, which are subject to continuous change
that could reduce or eliminate the need for such services. In addition, the
Company's other professional business services, including accounting, valuation
and financial planning, entail an inherent risk of professional malpractice and
other similar claims.

The Company maintains errors and omissions insurance coverage that it
believes will be adequate both as to risks and amounts. Although Management
believes its insurance coverage amounts are adequate, there can be no assurance
that the Company's actual future claims will not exceed the coverage amounts. If
the Company experiences a large claim on its insurance, the rates for such
insurance may increase. The Company's ability to incorporate such increases into
service fees to clients could be constrained by contractual arrangements with
clients. As a result, such insurance rate increases could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business-Company Services."

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<PAGE> 6

COMPETITION

The outsourced business services industry has been highly competitive
in recent years. This has resulted in the consolidation of many companies and
strategic alliances across industry lines. Competition is particularly acute
among small and medium sized providers because larger providers or strategic
alliances with larger providers can create service and price distortions in the
market place. The Company competes with these large providers, in-house employee
services departments, local outsourcing companies and independent consultants.
In addition, the Company may also compete with marketers of related services and
products that may offer outsourced business services in the future. In recent
years, competition in the specialty insurance industry has lead to the
consolidation of some of the industries' largest companies. Competition is
particularly acute among smaller, specialty carriers like the Company because
the market niches exploited by the Company are small and can be penetrated by a
larger carrier that elects to cut prices or expand coverage.

The Company has also experienced, and expects to continue to
experience, competition from new entrants into its markets. Increased
competition could result in pricing pressures, loss of market share and loss of
clients, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations. Many of the Company's
competitors have longer operating histories and significantly greater financial,
technical, marketing and other resources than the Company, including name
recognition with current and potential customers. Accordingly, new competitors
or alliances among competitors may emerge and rapidly acquire significant market
share. There can be no assurance that the Company will be able to compete
successfully against current and future competitors, or that competitive
pressure faced by the Company will not have a material adverse effect on its
business, financial condition and results of operations. See "Business-Industry
Background" and "- Competition."

NEED TO ATTRACT AND RETAIN EXPERIENCED PERSONNEL

The Company's success depends to a significant degree on its ability to
attract and retain experienced employees. There is substantial competition for
experienced personnel, which the Company expects to continue. Many of the
companies with which the Company competes for experienced personnel have greater
financial and other resources than the Company. In the future, the Company may
experience difficulty in recruiting and retaining sufficient numbers of
qualified personnel. The inability of the Company to attract and retain
experienced personnel could have a material adverse effect on its business,
financial condition and results of operations.
See "Business-Strategy."

DEPENDENCE ON KEY PERSONNEL

The Company depends and will continue to depend in the foreseeable
future on the services of its executive officers and key employees with
extensive experience and expertise in the outsourced business services industry.
The ability of the Company to retain its officers and key employees is important
to the success of the Company. The loss of key personnel, whether by resignation
or otherwise, could have a material adverse effect on the Company. The Company
does not maintain key personnel insurance on any of its officers or employees.
See "Management."

RELIANCE ON INFORMATION PROCESSING SYSTEMS

The Company's business depends, in part, upon its ability to store,
retrieve, process, and manage significant databases and periodically to expand
and upgrade its information processing capabilities.

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Interruption or loss of the Company's information processing capabilities
through loss of stored data, security breach, breakdown or malfunction of
computer equipment or software systems, telecommunications failure, conversion
difficulties, or damage to the Company's computer equipment or software systems
could have a material adverse effect on the Company. There can be no assurance
that the precautions the Company has taken to protect itself from or minimize
the impact of such events will be adequate. Any damage to the Company's data
information processing system, failure of telecommunications links or breach of
the security of the Company's computer systems could result in an interruption
of the Company's operations or other loss which may not be covered by the
Company's insurance. Any such event could have a material adverse effect on the
Company's business, financial condition and results of operations. The Company
has reviewed and continues to review its computer equipment and software systems
with regard to "Year 2000" problems. The Company has formulated a plan and
methodology for addressing "Year 2000" problems and is currently implementing
such plans. "Year 2000" problems, if they were to occur, could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business-Company Services."

INADEQUATE PRICING RISK OF INSURANCE

The primary risk of any insurance carrier is the risk of inadequate
pricing, which is a problem that manifests itself in the form of an unexpectedly
high level of claims after policy issuance. The Company utilizes a variety of
actuarial and qualitative methods to set price levels. Ultimately, however,
pricing depends upon an evaluation of prior experience as a predictor of future
experience. Events or trends that have not occurred in the past may not be
anticipated for the future and, therefore, could result in inadequate pricing
leading to elevated levels of losses. Such losses, if they were to occur, could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Management's Discussion and Analysis of Results
of Operations."

UNANTICIPATED LOSSES DUE TO INADEQUATE RESERVE ESTIMATES

When claims are made, the ultimate amount of liability cannot be
determined until claims are paid to the satisfaction of the insured or until
litigation finally determines liability in disputed cases. Since the process of
litigation and settlement can continue for years, the Company can only assess
its ultimate liability (and the ultimate expense of litigating disputed issues)
by estimation. These estimates, or reserves for losses and loss adjustment
expense (which, as of September 30, 1997, were approximately $42 million) are,
like prices, determined by a variety of actuarial and qualitative methods based
on prior experience. There can be no assurance that such reserves will be
sufficient to cover the ultimate liabilities of the Company for policy and bond
exposures.

The Company uses a reserving system which it believes will enable it to
meet claims obligations. Due to the nature of some of the coverages written,
claims may be presented which may not be settled for many years after they are
incurred; thus, subjective judgments as to the ultimate exposure to losses are
an integral and necessary component of the loss reserving process. The Company
regularly reviews reserves, using a variety of statistical and actuarial
techniques to analyze current claim costs, frequency and severity data, and
prevailing economic, social and legal factors. Reserves established in prior
years are adjusted as dictated by changes in loss experience and as new
information becomes available. An integral part of the reserve policy of the
Company includes a reserve for incurred but not reported ("IBNR") losses. There
can be no assurance that the assumptions upon which reserves are based are valid
or will be valid in the future. To help assure the adequacy of its IBNR reserves
and individual case reserves, the Company submits to an annual review by
professional actuaries who test reserve adequacy with a variety of sophisticated
mathematical models. In recent years, such actuaries have certified that

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<PAGE> 8

reserve levels of the Company are adequate. There can be no assurance, however,
that the modeling techniques of these actuaries will correctly forecast the
adequacy of the Company's reserves. The inadequacy of the Company's insurance
reserves may result in unanticipated losses which could have a material adverse
effect on its business, financial condition and results of operations. See
"Management's Discussion and Analysis of Results of Operations."

CHANGE IN GOVERNMENTAL REGULATION

The Company is affected by legislative law changes with respect to its
provision of payroll, employee benefits and pension plan administration, tax,
accounting and workers' compensation design and administration services.
Legislative changes may expand or contract the types and amounts of business
services that are required by individuals and businesses. There can be no
assurance that future laws will provide the same or similar opportunities to
provide business consulting and management services to individuals and
businesses that are provided today by existing laws.

The Company is also affected by both judicial and legislative law
changes with respect to its specialty insurance business. Judicial expansion of
terms of coverage can increase risk coverage beyond levels contemplated in the
underwriting and pricing process. In addition, surety bond coverages that are
established by statute may be adversely affected by legislative or
administrative changes of law. When government agencies change the threshold for
requiring surety, the demand for surety bonds is directly affected. An increase
in the threshold for requiring surety could have a material adverse effect on
the Company's business, financial condition and results of operations.

INADEQUATE REINSURANCE PROTECTION OF INSURANCE LIABILITIES

The Company depends heavily on reinsurers to assume a substantial
portion of the exposures underwritten by it. Failure by one or more reinsurers
(who are assuming risks from many sources over which the Company has no control)
could have a material adverse effect on the Company's performance, since the
Company would then be obligated to pay all or a portion of the failed
reinsurer's portion of losses. Moreover, the adequacy of reinsurance (even
assuming the solvency of all reinsurers) is a matter of estimation. As with
pricing and reserving, procurement of reinsurance is premised upon assumptions
about the future based upon past experience. Unanticipated events or trends
could produce losses inadequately covered by reinsurance which could have a
material adverse effect on the Company's business, financial condition and
results of operations.

MARKET REVERSES IN INVESTED ASSET PORTFOLIO

Investment of the Company's assets is critical to the maintenance of
the Company's solvency and profitability. The Company maintains a policy of
investing primarily in debt instruments of government agencies and corporate
entities with quality ratings of AA or better, and diversifying investments
sufficiently to minimize the risk of a substantial reverse or default in any one
investment. These policies are articulated by a written policy statement and
overseen by a formal investment committee of senior Company officials. The
Company also employs professional investment advisers to counsel it on matters
of policy as well as individual investment transactions, although these advisers
have no discretionary authority to deploy the Company's assets. Notwithstanding
these measures, an aggregation of serious reverses or defaults in the investment
portfolio could have a material adverse effect on the Company's business,
financial condition and results of operations.

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<PAGE> 9

VOLATILITY OF TRADING PRICE

The quoted price of the Common Stock could fluctuate widely in response
to variations in the Company's quarterly operating results, changes in earnings
estimates by securities analysts, changes in the Company's business and changes
in general market or economic conditions. In addition, in recent years, the
stock market has experienced extreme price and volume fluctuations which have
significantly affected the quoted prices of the securities of many growth
companies without regard to their specific operating performance. Such market
fluctuations could have a material adverse effect on the quoted price of the
Common Stock. See "Price Range of Common Stock."

CONTROL BY EXISTING STOCKHOLDERS

As of October 31, 1997, the Company's officers, directors and principal
stockholders beneficially owned an aggregate of 37,341,588 shares of Common
Stock of the Company (including shares that may be acquired upon exercise of
options or warrants within 60 days after the date of this Prospectus),
constituting approximately 64.4% of the outstanding shares of Common Stock.
In addition, as of said dated, Messrs. DeGroote and Huizenga owned an aggregate
of 22,691,556 shares of Common Stock of the Company, constituting approximately
43.2% of the outstanding shares of the Common Stock. Accordingly, such
persons are in a position to control actions that require the consent of the
holders of a majority of the Company's outstanding voting stock, including
the election of directors. See "Principal Stockholders."

ANTI-TAKEOVER EFFECT OF DELAWARE GENERAL CORPORATION LAW

Certain provisions of the Delaware General Corporation Law may
discourage takeover attempts that have not been approved by the Board of
Directors. See "Description of Capital Stock."

POSSIBLE DEPRESSING EFFECT OF FUTURE SALES OF THE COMPANY'S COMMON STOCK

Future sales of the Common Stock, or the perception that such sales
could occur, could adversely affect the market price of the Company's Common
Stock. There can be no assurance as to when, and how many of, the Shares will be
sold and the effect such sales may have on the market price of the Company's
Common Stock. As of October 31, 1997, the Company has registered for sale, from
time to time on a continuous basis under shelf registration statements, by
certain selling stockholders, an aggregate of 37,498,881 shares of the Company's
Common Stock. In addition to the shares registered pursuant to the Registration
Statement of which this Prospectus is a part, the Company intends to register an
aggregate of $125 million of the Company's Common Stock and/or debt securities
to be offered to the public. In addition, 21,345,296 shares of the Company's
Common Stock, which included shares issuable upon the exercise of warrants,
remain subject to various lock-up agreements. The terms of such lock-up
agreements will expire with respect to 14,710,125 of such shares by December 31,
1998. Such securities may or may not be subject to resale restrictions in
accordance with the Securities Act and the regulations promulgated thereunder.
As such restrictions lapse or if such shares are registered for sale to the
public, such securities may be sold to the public. In the event of the issuance
and subsequent resale of a substantial number of shares of the Company's Common
Stock, or a perception that such sales could occur, there could be a material
adverse effect on the prevailing market price of the Company's Common Stock.

NO DIVIDENDS

The payment and level of dividends on Common Stock are subject to the
discretion of the Board of Directors of the Company. The payment of dividends
will depend upon business decisions that will be made by the Board of Directors
of the Company from time to time based upon the results of

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<PAGE> 10

operations and financial condition of the Company and its subsidiaries and such
other considerations as the Board of Directors considers relevant. In addition,
the Company's credit facility contains restrictions on the Company's ability to
pay dividends. Since April 27, 1995, the Company has not paid cash dividends on
its Common Stock, and the Company's Board of Directors does not anticipate
paying cash dividends in the foreseeable future. The Company currently intends
to retain future earnings to finance the ongoing operations and growth of the
business. See "Dividend Policy."

FORWARD-LOOKING STATEMENTS

This Prospectus includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements other than statements of historical fact included in this
Prospectus, including without limitation, statements under "Prospectus Summary,"
"Management's Discussions and Analysis of Financial Condition and Results of
Operations" and "Business" regarding the Company's financial position, business
strategy and plans and objectives for future operations are forward-looking
statements. These forward-looking statements are commonly identified by the use
of such terms and phrases as "intends," "estimates," "expects," "projects,"
"anticipates," "foreseeable future," "seeks," "believes," and "scheduled" and,
in many cases, are followed by a cross-reference to "Risk Factors" or this
Section. Although the Company believes that the assumptions upon which such
forward-looking statements are based are reasonable, it can give no assurance
that such assumptions will prove to be correct. Important factors that could
cause actual results to differ materially from the Company's expectations
("Cautionary Statements") are disclosed under "Risk Factors" and elsewhere in
this Prospectus. All forward-looking statements in this Prospectus are expressly
qualified by the Cautionary Statements.

ACQUISITION TERMS

This Prospectus covers shares of Common Stock that may be issued from
time to time by the Company on the completion of acquisitions of assets,
businesses or securities, or the conversion of or payment of interest on
convertible securities issued in connection with such acquisitions of other
businesses or properties.

It is expected that the terms of acquisitions involving the issuance of
the Shares covered by this Prospectus will be determined by direct negotiations
with the owners or controlling persons of the assets, businesses or securities
to be acquired, and that the Shares issued will be valued at prices reasonably
related to the market price of the Common Stock either at the time an agreement
is entered into concerning the terms of the acquisition or at or about the time
the Shares are delivered. No underwriting discounts or commissions will be paid,
although finder's fees may be paid in connection with certain acquisitions. Any
person receiving such fees may be deemed to be an "underwriter" within the
meaning of the Securities Act, and any profit on the resale of shares of Common
Stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.

8
<PAGE> 11

PRICE RANGE OF COMMON STOCK

The Common Stock of the Company is quoted on The Nasdaq National Market
under the symbol "IASI." The following table sets forth the range of high and
low bid prices of the Common Stock of the Company as reported on The Nasdaq
National Market for the periods indicated. Prior to April 27, 1995, the day on
which the Common Stock of the Company was first publicly traded, there was no
public market for the Common Stock of the Company. The following prices are
adjusted for the Company's July 1996 two for one stock split.

<TABLE>
<CAPTION>
HIGH LOW
----------- -----------
<S> <C> <C>
1995
Second Quarter (beginning April 27, 1995) ..... $ 2.25 $ 1.25
Third Quarter ................................. 4.00 1.81
Fourth Quarter ................................ 2.31 1.56

1996
First Quarter ................................. $ 1.69 $ 1.25
Second Quarter ................................ 20.88 1.44
Third Quarter ................................. 18.75 4.75
Fourth Quarter ................................ 12.75 7.50

1997
First Quarter ................................. $ 15.13 $ 9.88
Second Quarter ................................ 11.50 7.88
Third Quarter ................................. 11.75 7.88
Fourth Quarter (through November 11, 1997)..... 14.63 8.75
</TABLE>

On November 11, 1997, the closing sale price of the Company's Common
Stock as quoted on The Nasdaq National Market was $13.00 per share. As of
October 28, 1997, the Company had 5,616 holders of record of its Common Stock.

DIVIDEND POLICY

The Company's credit facility contains restrictions on the Company's
ability to pay dividends. Since April 27, 1995, Company has not declared or paid
any cash dividends on its capital stock. The Company currently intends to retain
its earnings, if any, for use in its business and does not anticipate paying any
cash dividends in the foreseeable future.

9
<PAGE> 12

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The information presented below should be read in conjunction with the
Consolidated Financial Statements of the Company and the notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," included elsewhere in this Prospectus. As a result of its change in
focus to becoming a premier provider of outsourced business services to small
and medium sized companies, its acquisitions of service-providing companies and
the disposal of its environmental operations, the Company believes its
historical results of operations for the periods presented are not directly
comparable. In addition, management believes that the Company's historical
results of operations may not be consistent with its future performance.

The selected data presented below under the captions "Statements of Income
Data" and "Balance Sheet Data" for, and as of the end of, each of the years
in the three year period ended December 31, 1996, are derived from the
consolidated and combined financial statements the Company and its
subsidiaries, which financial statements have been audited by the Company's
independent certified public accountants. The consolidated and combined
financial statements as of December 31, 1996 and 1995, and for each of the
years in the three year period ended December 31, 1996, and the report thereon,
are incorporated by reference elsewhere in this prospectus.

The selected data presented below for the nine-month periods ended
September 30, 1996 and 1997, are derived from the unaudited consolidated
financial statements of the Company and its subsidiaries incorporated by
reference elsewhere in this prospectus.

10
<PAGE> 13

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------- -------------------------
1994(1) 1995(1) 1996 1996 1997
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS) (UNAUDITED)
STATEMENTS OF INCOME DATA:
Revenues:
Business services fees and commissions (regulated): $ -- $ -- $ 1,606 $ 1,426 $ 33,482
Specialty insurance services:
Premiums earned ............................. 23,368 26,962 27,743 19,607 26,791
Net investment income ....................... 2,477 3,341 3,564 2,523 3,135
Net realized gain on investments ............ 80 166 1,529 1,098 3,026
Other income ................................ 1,385 470 1,327 1,401 157
--------- --------- --------- --------- ---------
Total revenues ................................... 27,310 30,939 35,769 26,055 66,591
--------- --------- --------- --------- ---------
Expenses:
Operating expenses ............................. -- -- $ 1,107 1,281 26,561
Losses and loss adjustment expenses ............ 12,494 15,117 17,624 12,892 15,616
Policy acquisition expenses .................... 5,428 7,774 7,699 5,423 7,082
General and administrative expenses ............ -- -- 302 2,852

Depreciation and amortization expenses ......... -- -- 270 255 1,372
Other expenses ................................. 4,544 3,157 2,705 2,508 1,820
--------- --------- --------- --------- ---------
Total expenses ................................... 22,466 26,048 29,707 22,359 55,303
--------- --------- --------- --------- ---------
Income from continuing operations before interest
income and income tax expense .................. 4,844 4,891 6,062 3,696 11,288
Net interest income (expense)(2) ................. -- -- -- -- 870
Income from continuing operations before
income tax expense ............................. 4,844 4,891 6,062 3,696 12,158
Income tax expense ............................... 1,344 1,422 1,640 1,431 4,401
Income from continuing operations ................ 3,500 3,469 4,422 2,265 7,757
--------- --------- --------- --------- ---------
Loss from discontinued operations ................ -- -- (38) -- (663)
Net Income ....................................... $ 3,500 $ 3,469 $ 4,384 $ 2,265 $ 7,094
========= ========= ========= ========= =========
Primary and fully diluted net income per share -
continuing operations .......................... $ 0.20 $ 0.20 $ 0.21 $ 0.12 $ 0.18
Primary and fully diluted loss per share -
discontinued operations ........................ -- -- -- -- (0.01)
Primary and fully diluted net income per share ... $ 0.20 $ 0.20 $ 0.21 $ 0.12 $ 0.17
Weighted average common and common share
equivalents, primary and fully diluted ........ 16,956 16,956 32,213 16,956 52,931
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
--------------------------- -------------------------
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
(IN THOUSANDS) (UNAUDITED)
BALANCE SHEET DATA:
Total investments ................................ $ 58,214 $ 68,649 $ 77,897
Cash and cash equivalents ........................ 2,694 39,874 21,170
Total assets ..................................... 86,735 167,330 240,568
Notes payable and capitalized leases.............. 47 3,211 5,196
Losses and loss expenses payable ................. 37,002 41,099 49,272
Unearned premiums ................................ 15,636 18,637 26,772
Stockholders' equity ............................. 26,768 91,322 125,638
</TABLE>

- --------------
(1) Fees and expenses generated by Century Surety Agency are not meaningful for
this presentation.

(2) Does not include investment income associated with
the Company's specialty insurance services.

11
<PAGE> 14

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following should be read in conjunction with the documents
incorporated herein by reference and made a part of this Prospectus. See
"Incorporation of Certain Documents by Reference."

OVERVIEW

IASI is a leading provider of outsourced business services, including
specialty insurance services, to small and medium sized companies throughout the
United States. The Company provides integrated services in the following areas:
accounting systems, advisory and tax; employee benefits design and
administration; human resources; information technology systems; payroll;
specialty insurance; valuation; and workers' compensation. These services are
provided through a network of 60 Company offices in 25 states, as well as
through its subsidiary Comprehensive, a franchisor of accounting services with
250 franchisee offices located in 42 states. As of October 31, 1997, the Company
served approximately 50,000 clients, of which approximately 24,000 were served
through the Comprehensive franchisee network. Management estimates that its
clients employ over 800,000 employees, including 240,000 employed by clients of
the Comprehensive franchise network.

The Company was incorporated under Delaware law on June 16, 1987 under
the name Stout Environmental, Inc. and primarily supplied hazardous waste
services. The Company was acquired by Republic Industries, Inc. ("RII") in 1992.
RII effected a spin-off of the Company's operations through a distribution of
the Company's stock to the stockholders of RII in April 1995. At such time, the
Company was named "Republic Environmental Services, Inc." and was traded on the
Nasdaq National Market under the symbol "RESI." On June 24, 1996, the Company
began trading under the symbol "IASI" in anticipation of its "reverse merger"
with Century Surety Company and Commercial Surety Agency, Inc. (collectively,
the "Century Group"), which ultimately resulted in a change of its name to
"International Alliance Services, Inc." The name change signaled a new direction
for the Company away from hazardous waste. In furtherance of its strategic
redirection towards business services, the Company successfully divested its
hazardous waste operations in two separate transactions completed in July and
September 1997. See "- Liquidity and Capital Resources."

ACQUISITIONS

Pursuant to a strategic redirection of the Company initiated in November 1996,
the Company began its acquisition program to expand its operations rapidly in
the outsourced business services industry from its existing specialty insurance
platform. From November 1996 through September 30, 1997, the Company acquired
the businesses of 23 companies representing over $90 million in revenues. The
majority of these acquisitions have been accounted for under the purchase
method of accounting. The Company anticipates future significant acquisitions
will be accounted for, when possible, under the pooling of interests method of
accounting. Recent acquisitions have resulted in significant increases in
goodwill and other intangible assets, and the Company anticipates that such
increases will continue as a result of future acquisitions. Net identifiable
intangible assets, which include customer lists, employee lists and covenants
not to compete, acquired in the acquisitions were approximately $1.2 million at
September 30, 1997, representing less than 1% of the Company's total assets.
Net identifiable intangible assets are recorded at fair value on the date of
acquisition and are being amortized over periods ranging from three to 10
years. Goodwill, which relates to the excess of cost over the fair value of net
assets of businesses acquired, was approximately $55 million at September 30,
1997, representing approximately 23% of the

12
<PAGE> 15

Company's total assets. The Company amortizes goodwill on a straight line basis
for periods not exceeding 30 years.

The Company has completed from October 1, 1997 through November 3,
1997, or has publicly announced as pending an additional 15 acquisitions
representing over $40 million in revenues. These acquisitions are not included
in the results of operations for the nine month period ended September 30, 1997.
The Company believes that substantial additional acquisition opportunities exist
in the outsourced business services industry.

DIVESTITURES

In July 1997, the Company sold the majority of its environmental
services business, and in September 1997, it sold its remaining environmental
operations. Taken together, these transactions for cash and notes approximated
the net book value of the assets sold. The Company's contingent liability is
limited to $1.5 million in connection with such divestitures. Management does
not believe the Company will experience a loss in connection with such
contingencies.

COMPARABILITY OF HISTORICAL RESULTS

As a result of the Company's change in focus to becoming a premier
provider of outsourced business services to small and medium sized companies,
its acquisitions of service-providing companies, and the sale of its
environmental operations, the Company believes its historical results of
operations for the periods presented are not directly comparable. In addition,
management believes that the Company's historical results of operations may not
be consistent with its future performance.

RESULTS OF OPERATIONS

Revenues

Revenues represent the consolidated operating results from the
Company's outsourced business services, including its specialty insurance
services. The Company anticipates that revenues from its specialty insurance
services will become a smaller percentage of the Company's total revenues as the
revenues from its other business services grow more quickly. For example, for
the three months ended March 31, June 30, and September 30, 1997, the percentage
of Company revenues represented by specialty insurance services was 64%, 51% and
44%, respectively. For these three month periods, all non-regulated revenues
generated from the specialty insurance services segment have been reclassified
in the business services segment.

Revenues from the Company's discontinued environmental services
operations are not included for any of the periods presented. See "--Income
(Loss) from Discontinued Operations."

Revenues for the Company consist of fees and commissions, premiums
earned, net investment income and net realized gain on investments. Fees and
commissions represent fees received by the Company for providing outsourced
business services other than regulated specialty insurance services. Premiums
earned represent policy proceeds received by the Company for providing insurance
policies and surety bonds through its regulated specialty insurance services.
Premiums earned are recognized as revenue in proportion to the insurance
coverage provided, which is generally ratable over the terms of the policies.
Net investment income represents interest earned on investments of the assets
associated

13
<PAGE> 16

with regulated specialty insurance services. Net realized gain on investments
represents realized gains on the sale of assets associated with regulated
specialty insurance services.

In October 1997, the Company acquired Comprehensive, a franchisor of
outsourced business services with 250 franchisee offices in 42 states.
Comprehensive generates its revenues through fees charged to its franchisees. In
addition, Comprehensive intends to cross-market the Company's broad array of
services, and fees earned by the Company as a result of such cross-marketing
will be included in the Company's revenues. Franchisees of Comprehensive earn
fees from the Company for facilitating the provision of these services. The
acquisition of Comprehensive was subsequent to September 30, 1997; therefore,
its results have not yet been included in the Company's financial statements.

Expenses

Expenses for the Company consist of operating expenses, losses and loss
adjustment expenses, policy acquisition expenses, general and administrative
expenses, and depreciation and amortization expenses. Operating expenses are
primarily personnel and occupancy costs associated with the Company's outsourced
business services other than specialty insurance services. Losses and loss
adjustment expenses relate primarily to actual and estimated losses associated
with claims paid under insurance policies written by the Company. Policy
acquisition expenses, which consist of commissions paid to sales agents and
brokers relating to selling insurance policies, premium taxes paid to states and
certain underwriting expenses that vary with and are primarily related to policy
production, are deferred and amortized ratably over the policy term. General and
administrative expenses consist primarily of personnel costs, fees and
commissions and other overhead costs for finance and corporate services.
Depreciation and amortization expenses relate primarily to the amortization of
goodwill associated with acquisitions.

Net Interest Income (Expense)

Interest income relates primarily to interest received by the Company
on its cash and cash equivalents. Interest expense relates primarily to interest
paid by the Company associated with its debt obligations. Neither category
includes interest associated with the assets of the Company's regulated
specialty insurance services.

Loss from Discontinued Operations

The Company sold its environmental services operations in two separate
transactions in July and September 1997. The loss from discontinued operations
for the nine months ended September 30, 1997 was $663,000, net of a tax benefit
of $316,000.

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996

Revenues

Revenues increased to $66.6 million for the nine month period ended
September 30, 1997 from $26.1 million for the comparable period in 1996,
representing an increase of $40.5 million, or 155%. The increase was primarily
attributable to increases in fees and commissions and increases in premiums
earned. Fees and commissions increased to $33.5 million for the nine month
period ended September 30, 1997 from $1.4 million for the comparable period in
1996. The increase was primarily attributable to the acquisitions completed
after the period ended September 30, 1996. Due to the majority of recent

14
<PAGE> 17

acquisitions having been accounted for under the purchase method, the Company's
consolidated financial statements give effect to such acquisitions only after
their respective acquisition dates.

Premiums earned increased to $26.8 million for the nine month period
ended September 30, 1997 from $19.6 million for the comparable period in 1996,
representing an increase of $7.2 million, or 37%. Gross written premiums
increased to $46.5 million for the nine month period ended September 30, 1997
from $31.9 million for the comparable period in 1996, representing an increase
of $14.6 million, or 46%. Net written premiums increased to $30.2 million for
the nine month period ended September 30, 1997 compared to $23.1 million for the
comparable period in 1996, representing an increase of $7.1 million, or 31%.
These increases were primarily attributable to the growth in general liability
premiums.

Net investment income increased to $3.1 million for the nine month
period ended September 30, 1997 from $2.6 million for the comparable period in
1996, representing an increase of $0.5 million, or 19%. This increase was
attributable to an increase in the annualized return on investments to
approximately 5.7% for the nine month period ended September 30, 1997 from 5.3%
for the comparable period in 1996 and to an increase in the average investments
outstanding to $77 million for the nine month period ended September 30, 1997
from $64 million for the comparable period in 1996.

Net realized gain on investments increased to $3.1 million for the nine
month period ended September 30, 1997 from $1.1 million for the comparable
period in 1996, representing an increase of $2.0 million, or 182%. This increase
was primarily due to increased sales of equity securities.

Other income decreased to $157,000 for the nine month period ended
September 30, 1997 from $1.4 million for the comparable period in 1996,
representing a decrease of $1.3 million. The decrease was primarily
attributable to non-recurring income realized in the three month period ended
March 31, 1996.

Expenses

Total expenses increased to $55.3 million for the nine month period
ended September 30, 1997 from $22.4 million for the comparable period in 1996,
representing an increase of $32.9 million. Such increase was primarily
attributable to the increase in operating expenses, which reflects the impact of
the Company's acquisitions made in 1997. As a percentage of revenues, total
expenses decreased to 83% for the nine month period ended September 30, 1997
from 86% for the comparable period of 1996. This decrease was primarily
attributable to the spread of total expenses over higher revenues.

Operating expenses for the business services operations increased to
$26.6 million for the nine month period ended September 30, 1997 from $1.3
million for the comparable period in 1996, representing an increase of $25.3
million. Such increase was attributable to business services acquisitions in
late 1996 and in 1997. As a percentage of fees and commissions, operating
expenses decreased to 79% for the nine month period ended September 30, 1997
from 93% for the comparable period in 1996. This decrease was primarily
attributable to the spread of operating expenses over higher revenues.

Loss and loss adjustment expenses increased to $15.6 million for the
nine month period ended September 30, 1997 from $12.9 million for the comparable
period in 1996, representing an increase of $2.7 million, or 21%. Such increase
was attributable to the increased premium volume for liability coverages. As a
percentage of premiums earned, loss and loss adjustment expenses decreased
to 58% for the nine month period ended September 30, 1997 from 66% for the
comparable period in 1996.

15
<PAGE> 18

Such decrease was the result of claims from prior years that were settled and
paid in 1996 for higher than expected amounts.

Policy acquisition expenses increased to $7.1 million for the nine
month period ended September 30, 1997 from $5.4 million for the comparable
period in 1996, representing an increase of $1.7 million, or 31%. The increase
corresponds directly to the increase in premium volume. As a percentage of net
written premiums, policy acquisition expenses were 23% for the nine
month periods ended September 30, 1996 and 1997.

General and administrative expenses increased to $2.8 million for the
nine month period ended September 30, 1997 from zero for the comparable period
in 1996. Such increase was attributable to the creation of a corporate function
in the fourth quarter of 1996 that did not exist prior to the reverse merger.
General and administrative expenses represented 4% of total revenues for the
nine month period ended September 30, 1997.

Depreciation and amortization expense increased to $1.4 million for the
nine month period ended September 30, 1997 from $255,000 for the comparable
period in 1996, representing an increase of $1.1 million. The increase is a
result of the increase of goodwill amortization resulting from the 23
acquisitions completed by the Company since September 30, 1996. As a percentage
of total revenues, depreciation and amortization expense increased to 2% for the
nine month period ended September 30, 1997 from 1% for the comparable period in
1996. Such increase was attributable to the implementation of the Company's
acquisition strategy.

Other expenses decreased to $1.8 million for the nine month period
ended September 30, 1997 from $2.5 million for the comparable period in 1996,
representing a decrease of $0.7 million. Such decrease was primarily
attributable to the return of certain ceding commissions, which are calculated
based on historical experience in relation to certain reinsurance contracts. The
inclusion of the return of ceding commissions as an other expense item conforms
to insurance industry standards. As a percentage of net written premiums, other
expenses decreased to 6% for the nine month period ended September 30, 1997 from
11% for the comparable period in 1996. Such decrease reflects the positive
impact of the ceding commissions.

Net Interest Income (Expense)

Net interest income increased to $0.9 million for the nine month period
ended September 30, 1997 from zero for the comparable period in 1996. Such
increase was attributable to the increase in cash and cash equivalent balances
for the Company's non-insurance entities acquired or established after September
30, 1996.

Income Tax Expense

Income tax expense increased to $4.4 million for the nine month period
ended September 30, 1997 from $1.4 million for the comparable period in 1996,
representing an increase of $3.0 million. The estimated effective tax rate for
the nine month periods ended September 30, 1997 and 1996 was approximately 36%
and 38%, respectively. The change in the effective tax rate was primarily due
to quarterly timing differences in the Company's specialty insurance business.

16
<PAGE> 19

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities decreased to $4.8 million for
the nine month period ended September 30, 1997 from $9.2 million for the
comparable period in 1996. The decrease in cash flows is due to the changes in
assets and liabilities on new subsidiaries on a post-acquisition basis.

Cash used in investing activities increased to $27.6 million for the
nine month period ended September 30, 1997 from $7.2 million for the comparable
period in 1996. Cash used in investing activities was primarily for acquisitions
and the purchase of fixed maturity investments. The Company paid $20.1 million,
net of cash acquired, in connection with the acquisition of the businesses of
21 companies.

Cash provided by financing activities increased to $4.1 million for the
nine month period ended September 30, 1997 from $1.3 million of cash used in
financing activities for the comparable period in 1996. Cash provided by
financing activities for the nine month period ended September 30, 1997 was
primarily attributable to $5.3 million from the issuance of 616,611 shares of
Common Stock in a second closing of the private placement initially closed in
December 1996, $1.1 million from the exercise of options and warrants to
purchase 367,092 shares of Common Stock and $2 million in proceeds from certain
debt, offset by $4.3 million of repayment of bank debt financed through cash
flows from operations.

Capital expenditures increased to $1.1 million for the nine month
period ended September 30, 1997 from $129,000 for the comparable period in 1996.
These expenditures consisted of computer related expenditures and office
furniture and were financed with cash flows from operations. The Company has
approximately $0.5 million in outstanding commitments relating primarily to the
buildout of new office space and expects to finance this expenditure through
cash flows from operations.

From January 1, 1997 through September 30, 1997, the Company acquired
the business of 21 companies. These 21 acquisitions represented aggregate annual
revenues of approximately $80 million, with aggregate consideration consisting
of approximately $20.1 million, net of cash acquired, 4,661,569 shares of Common
Stock, warrants to purchase an additional 1,510,000 shares of Common Stock and
assumed debt of $5.1 million. In addition, the Company has completed from
October 1, 1997 through November 3, 1997, or has publicly announced as pending
an additional 15 acquisitions. The Company believes it can fund the cash portion
of these acquisitions from cash on hand, cash flows from operations and its
credit facility. The Company believes that each of these acquisitions is
consistent with its strategy of entering new markets and expanding in existing
markets. See "Business - Strategy."

The Company has a $50 million revolving credit facility with Bank of
America, National Trust & Savings Association ("Bank of America"), as Agent. At
September 30, 1997, no amounts were outstanding under such credit facility.
The interest rate under the credit facility is, at the Company's option, either:
(a) the higher of (i) 0.50% per annum above the latest Federal Funds Rate or
(ii) the rate of interest in effect from time to time announced by the Bank of
America, San Francisco, California office as its "reference rate," or (b) a
floating rate based on certain offshore dollar interbank market rates. The
credit facility requires the Company to comply with various affirmative and
negative covenants, including (a) observance of various financial and other
covenants, (b) restrictions on additional indebtedness, (c) restrictions on
dividend payments and (d) restrictions on certain liens, mergers, dispositions
of assets and investments. The Company must also maintain a net worth equal to
the sum of (a) $88 million plus (b) 70% of subsequent net income plus (c) the
proceeds of any equity security offerings.

17
<PAGE> 20

The capital structure of the Company changed significantly from October
1996 through December 1996. In October 1996, the Company issued 14,760,000
shares of the Company's Common Stock, warrants to purchase an additional
4,200,000 shares of Common Stock in three equal tranches at exercise prices of
$2.625 to $3.875 per share expiring in two to four years from the date of
issuance, and a promissory note in the original principal amount of $4 million.
Concurrently therewith, Michael G. DeGroote (through a corporation controlled by
him) and H. Wayne Huizenga (through an investment partnership controlled by
him) each purchased 2 million shares of the Common Stock of the Company at
$2.625 per share and warrants to purchase 6 million shares each in three equal
tranches at exercise prices of $2.625 and $3.875 per share expiring in two to
four years from the date of issuance for an aggregate purchase price of $10.5
million.

In December 1996, the Company sold 3,251,888 units of IASI for $9.00
per unit through a private placement. This private placement resulted in net
proceeds of approximately $27.6 million. In addition, in April 1997, the Company
sold 616,611 of such units for net proceeds of $5.3 million through a second
closing of the private placement initially closed in December 1996. Each unit
consisted of one share of Common Stock and one warrant to purchase one share of
Common Stock at an exercise price of $11.00 per share exercisable, in whole or
in part, for a three year period beginning on the date of issuance.

Management believes that the Company's cash on hand, credit facility
and its cash flow from operations will provide sufficient liquidity to fund
current operations and its initial expansion. Depending on the success
experienced by the Company with respect to its acquisition program, the Company
may need to seek additional financing through the public or private sale of
equity or debt securities in order to fund its acquisitions. There can be no
assurance that the Company could secure such additional financing if and when it
is needed or on terms the Company deems acceptable.

SEASONAL VARIATIONS IN OPERATING RESULTS

Certain divisions of the Company regularly experience higher revenues
during varying quarters due to a number of factors, including the seasonality of
tax processing, tax planning, workers' compensation group rating programs and
the seasonal needs for some specialty insurance programs. Due to the combination
of the Company's acquisition program and the inherent seasonality of the
Company's and certain of its acquisition candidates' businesses, the Company's
revenues are difficult to forecast. The Company believes that quarter-to-quarter
comparisons of results of operations are not necessarily meaningful or
indicative of the results that the Company may achieve for any subsequent
quarter or fiscal year. The Company's past operating results should not be
considered a reliable indicator of the Company's future performance.

18
<PAGE> 21

BUSINESS

The following section contains forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth under "Risk Factors" and elsewhere in
this Prospectus. See "Forward-Looking Statements."

OVERVIEW

IASI is a leading provider of outsourced business services to small and
medium sized companies throughout the United States. The Company provides
integrated services in the following areas: accounting systems, advisory and
tax; employee benefits design and administration; human resources; information
technology systems; payroll; specialty insurance; valuation; and workers'
compensation. These services are provided through a network of 60 Company
offices in 25 states, as well as through its subsidiary Comprehensive, a
franchisor of accounting services with 250 franchisee offices located in 42
states. As of October 31, 1997, the Company served approximately 50,000 clients,
of which approximately 24,000 are served through the Comprehensive franchisee
network. Management estimates that its clients employ over 800,000 employees,
including 24,000 employed by clients of the Comprehensive franchise network.

Pursuant to a strategic redirection of the Company initiated in
November 1996, the Company began its acquisition program to expand its
operations rapidly in the outsourced business services industry from its
existing insurance platform. From November 1, 1996 through September 30, 1997,
the Company acquired the businesses of 23 companies representing over $90
million in revenues. The Company's acquisition program typically focuses on (i)
market entry acquisitions in which the Company establishes a significant
presence in a city or (ii) follow-on acquisitions of additional service
providers in areas where the Company's presence is established, increasing the
number of clients served and services offered in such markets. The Company seeks
to acquire profitable, well-run companies and to continue to employ their
existing management teams, providing them with incentive by utilizing a large
proportion of the Company's Common Stock, which is typically subject to a
lock-up agreement for up to a two year period, as consideration for the
acquisitions. The Company has completed from October 1, 1997 through November 3,
1997, or has publicly announced as pending, an additional 15 acquisitions
representing over $40 million in revenues. The Company believes that substantial
additional acquisition opportunities exist throughout the United States.

INDUSTRY BACKGROUND

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<PAGE> 22

- There is increasing recognition of the many advantages that
outsourcing may offer, including: (i) the enhanced opportunity for
businesses to focus on operating rather than administrating, (ii)
access to expertise related to the growing complexities of human
resource, accounting, legal and regulatory compliance, (iii) cost
reductions, (iv) attracting and retaining employees by providing
benefits that are more comparable to those offered by larger
employers, and (v) the ability to avoid significant investment of
capital in administrative systems. As a result, more companies
have begun to use outsourced business services.

- Companies that have traditionally outsourced some portion of
their administrative tasks are utilizing a broader array of
outsourced business services. For instance, while companies have
long used accountants to prepare their tax returns and specialists
in specific situations, business owners are increasingly depending
on outsiders to provide even more services for their businesses
and to offer cost effectively an increased level of benefits to
their employees.

- There are many users of outsourced business services including
small, medium and large companies. The Company focuses its efforts
on small and medium sized businesses, which it believes gain a
greater competitive advantage from use of the Company's services.
In addition, the Company believes this is an attractive market due
to its large and growing size. According to the U.S. Census
Bureau, there were approximately 5.2 million businesses in the
United States with between one and 500 employees in 1994.
According to the Small Business Administration, the number of
small businesses in the U.S. has increased 49% since 1982. Despite
the continued growth of small businesses and the increasing
popularity of outsourcing certain non-core administrative
functions, there has been little penetration of this large and
growing market.

The outsourced business services industry is highly fragmented, with the
majority of the industry participants, such as accounting, employee benefits or
payroll firms or professional employer organizations ("PEOs"), offering only one
or a limited number of services. The industry consists of a small number of
multi-location regional or national operators and a large number of relatively
small, independent operators in local markets. The Company believes that there
are substantial growth and consolidation opportunities for companies with access
to capital and the ability to implement a disciplined acquisition program for
several reasons, including the highly fragmented nature of the industry, the
advantages of economies of scale, and the desire of many long-time owners for
liquidity.

The Company is not organized in the same manner as a PEO. PEO's are in the
business of providing employees to clients under a "partnering arrangement" in
which the PEO establishes a co-employment relationship with the worksite
employees of its clients, contractually assuming substantial employer
responsibilities with respect to those worksite employees while operational
control of the business remains with the client. The Company does not currently
co-employ, assume or share control responsibility for its clients' employees.
Because worksite employees remain solely the employees of the clients, the
Company is able to avoid potential liability for the actions of those employees
and the consequences of regulatory volatility pertaining to PEO's. In addition,
PEO's typically supply a specific set of limited services to clients. In
contrast, the Company supplies its clients with a customized service offering
that may include from one to all of its services, depending on the specific
needs of each client.

20
<PAGE> 23

STRATEGY

The Company's goal is to be the nation's premier outsourced business
services provider to small and medium sized companies. The Company's strategy to
achieve this goal is to continue to expand aggressively while also providing
clients with a broad range of high quality services and products. The Company
intends to expand its client base and provide additional services and products
to its existing clients through internal growth and through acquisitions. The
Company's strategy includes the following primary factors:

- Provide Broad Range of High Quality Services. The Company is
committed to providing high quality services and products to
satisfy its clients' business services needs. The Company believes
that its ability to provide its clients with one IASI account
manager having access to a full range of services and products is
viewed as highly efficient to the clients. The Company believes
that this ability gives it a competitive advantage in accessing
the small to medium sized business market.

- Internal Growth. The Company also believes that as it continues
to grow, there is an opportunity to sell its existing services and
products to new clients as well as to cross-market new services to
its existing clients. The Company believes that its Comprehensive
network of 250 franchisees will provide it with an additional
robust opportunity to cross-market its services.

- Growth through Strategic Acquisitions. The Company is currently
pursuing acquisitions to increase the range of services and
products it offers and to increase its client base for existing
services and products. The Company intends to use acquisitions to
expand into new geographic markets and to increase the number of
services and products offered in existing markets. The Company
also believes that its acquisition program will accelerate its
internal growth when its full line of services is marketed to the
existing client base of each business acquired.

ACQUISITION PROGRAM

The Company's acquisition program was established in November 1996 and
relies upon the Company's strong management capabilities, strict acquisition
criteria and defined integration procedures. From November 1, 1996 through
September 30, 1997, the Company acquired 23 businesses, including accounting
systems, advisory and tax services firms; employee benefits design and
administration firms; human resources services firms; information technology
systems firms; payroll services firms; specialty insurance agencies; valuation
services firms; and workers' compensation services firms. The Company has
completed from October 1, 1997 through November 3, 1997, or has publicly
announced as pending, an additional 15 acquisitions representing over $40
million in revenues. The Company believes that additional acquisition candidates
meeting the Company's acquisition criteria exist within its current market
areas, as well as throughout the United States.

The Company's 23 acquisitions represented aggregate annual revenues of
approximately $90 million, with aggregate consideration consisting of
approximately $20.5 million, net of cash acquired, 5,454,069 shares of Common
Stock, warrants to purchase an additional 2,410,000 shares of Common Stock and
assumed debt of $5.5 million. A significant portion of the purchase price of the
Company's acquisitions has historically been paid with the Company's Common
Stock, which is typically subject to a lock-up agreement for up to a two year
period. The Company believes this practice, together with its practice of
executing employment and non-competition agreements with key members of the
acquired

21
<PAGE> 24

management teams, best aligns the interests of the newest members of the Company
with the Company's long-term interests. The Company typically seeks to retain
the acquired company's qualified managers, key employees and principal office
locations.

The Company's senior management continually works to identify
acquisition candidates. The Company has developed a set of financial, geographic
and management criteria designed to assist management in the evaluation of each
acquisition candidate. These criteria consist of a variety of factors,
including, among others: (i) historical growth and profitability as well as
projected financial performance and earnings accretion; (ii) experience, depth,
entrepreneurism and reputation of management; (iii) customer service reputation
and relationships; (iv) composition and size of the market area and customer
base; (v) opportunity to enhance and expand the Company's services provided and
to cross-market such services to existing and new clients; (vi) ability to
identify and attract other quality acquisition candidates; and (vii) potential
synergies with the Company's existing operations.

The Company utilizes an established integration procedure designed to
effect a prompt and efficient integration of acquired businesses with minimal
disruption of the on-going operations of the Company and the acquired
businesses. Once a business has been acquired, the Company implements programs
designed to enable the Company to cross-market its services, reduce costs and
improve employee productivity, operating efficiencies and overall profitability.

The following chart lists the 23 acquisitions by merger or purchase of
assets that the Company has completed through September 30, 1997 and the 15
additional acquisitions the Company has completed since October 1, 1997, or has
publicly announced as pending.

<TABLE>

COMPANY SERVICES OFFERED PRINCIPAL MARKETS DATE ACQUIRED

<S> <C> <C> <C>
Environmental & Commercial Insurance specialty insurance Columbus, Ohio November 1996
Agency, Inc. Slidell, Louisiana
Reston, Virginia

SMR & Co. Business Services, Inc. accounting systems, Cleveland, Ohio December 1996
advisory and tax

Midwest Indemnity Corporation specialty insurance Chicago, Illinois January 1997
(certain assets only)

Midland Consultants, Inc. human resources Cleveland, Ohio February 1997
(executive search)

Millisor & Nobil Compensation workers' compensation Cleveland, Ohio March 1997
Management Co. administration

Millisor & Nobil Enterprises, Inc. workers' compensation Columbus, Ohio March 1997
administration

BFS Retail, Inc. workers' compensation Cleveland, Ohio March 1997
administration

The Benefits Group Agency, Inc. employee benefits design Cleveland, Ohio March 1997
and administration Columbus, Ohio

TBG Investment Advisors Agency, Inc. employee benefits design Cleveland, Ohio March 1997
and administration

TBG South Agency, Inc. employee benefits design Columbus, Ohio March 1997
and administration
</TABLE>

22
<PAGE> 25

<TABLE>

<S> <C> <C> <C>
Next, Inc. specialty insurance Boca Raton, Florida April 1997

Surety Associates Ltd. specialty insurance Hartford, Connecticut April 1997
(certain assets only)

The Connecticut Escrow Company specialty insurance Farmington, Connecticut April 1977
(funds administration)

Network Plus, Inc. network and Cleveland, Ohio April 1997
telecommunications
systems consultants

Marvel Consultants, Inc. human resources Cleveland, Ohio May 1997
(executive search)

ERIC Group, Inc. specialty insurance Denver, Colorado June 1997
(certain assets only)

Environmental Safety Systems, Inc. specialty insurance Denver, Colorado June 1997
(certain assets only) (risk management company)

Zelenkofske, Axelrod & Co., Ltd. accounting systems, Philadelphia, Pennsylvania June 1997
advisory and tax Harrisburg, Pennsylvania
Framingham, Massachusetts
Milwaukee, Wisconsin

St. James General Agency, Inc. specialty insurance Houston, Texas July 1997

BMS, Inc. payroll administration, Roanoke, Virginia August 1997
employee benefits
outsourcing
BMS Employee Benefits, Inc. Roanoke, Virginia August 1997
payroll administration, Greensboro, North Carolina
employee benefits Midlothian, Virginia
administration Columbia, South Carolina
Charlotte, North Carolina

Managed Care Workers Compensation workers' compensation Columbus, Ohio August 1997
Business of Anthem Insurance
Companies, Inc.

Valuation Counselors Group, Inc. valuation and appraisal Chicago, Illinois September 1997
Gig Harbor, Washington
Mequon, Wisconsin
St. Louis, Missouri
Los Angeles, California
Lawrenceville, New Jersey
Atlanta, Georgia
Wellesley, Massachusetts
Alexandria, Virginia
New York, New York
Lansing, Michigan
Dallas, Texas

Comprehensive Business Services, Inc. franchisor of accounting Mission Viejo, California October 1997
systems and tax services

Funds Administration Services LLC specialty insurance Houston, Texas October 1997
(funds administration)

BAR-KEN, Inc. accounting systems and Houston, Texas October 1997
tax
Thomas Olivas & Assoc., Inc. accounting systems and Milwaukee, Wisconsin October 1997
tax
Robert A. Smoot, Inc. accounting systems and Baltimore, Maryland October 1997
tax
</TABLE>

23
<PAGE> 26

<TABLE>

<S> <C> <C> <C>
Tanker & Associates, Inc. employee benefits Philadelphia, Pennsylvania November 1997
administration

Health Administration Services, Inc. benefits administration Houston, Texas pending

Serdon, Inc. accounting systems and Denver, Colorado pending
tax
Carpenter, Kuhen & Sprayberry, Inc. accounting systems and Bakersfield, California pending
tax

Smith & Radigan, C.P.A. accounting systems and Atlanta, Georgia pending
tax
Bass Consultants, Inc. employee benefits Houston, Texas pending
administration

Trilogy Associates, Inc. information technology Philadelphia, Pennsylvania pending
and management

Joel Shear & Associates human resources Philadelphia, Pennsylvania pending
(executive search)

National Benefits Systems, Inc. employee benefits Scottsdale, Arizona pending
administration

Ronald Mercer, C.P. accounting systems and Chicago, Illinois pending
tax
</TABLE>

COMPANY SERVICES

The Company believes that it offers a comprehensive array of outsourced
business services for small and medium sized companies. IASI can provide a
customized package of services to its clients, which strengthens the IASI/client
relationship and often leads to insights on useful additional service offerings.
The breadth of the Company's service offerings allows IASI to continue to assist
and retain clients as the clients grow.

IASI clients have the opportunity to select and contract for specific
services from a broad range of services including accounting systems, advisory
and tax; employee benefits design and administration; human resources;
information technology systems; payroll; specialty insurance; valuation; and
workers' compensation. Within each of its broad service areas, the Company
offers many specific functions. The Company monitors each client through
personal contact with the IASI account manager in order to make appropriate
services available to each client.

Accounting systems, advisory and tax services. The Company offers tax
planning and preparation, cash flow management, strategic planning, consulting
services for outsourced departments, and recordkeeping assistance. In addition
to federal, state and local tax return preparation, the Company provides tax
projections based on financial and investment alternatives and assists in
appropriate tax structuring of business transactions such as mergers and
acquisitions. The Company offers quarterly and year-end payroll tax reporting,
corporate, partnership and fiduciary tax planning and return preparation, as
well as advice regarding the choice of a proper legal entity form through which
to conduct business. In addition, the Company offers small and medium sized
businesses the opportunity to outsource their back-office functions. The Company
also offers financial planning services to individuals, including investment
counseling, personal financial statements, mortgage and investment analysis,
succession planning, retirement planning and estate planning. In addition, the
Company offers profitability, operational and efficiency enhancement consulting
to a number of specialized industries.

24
<PAGE> 27

Employee benefits design and administration. The Company offers
comprehensive employee benefits consulting services. These include the design,
implementation and administration of 401(k) plans, profit sharing plans, defined
benefit plans, money purchase plans and actuarial services. The Company also
assists in the choice of health and welfare benefits such as group health
insurance plans, dental and vision care programs, group life, accidental death
and dismemberment or disability programs, voluntary insurance programs, health
care and dependent care spending accounts and premium reimbursement plans. In
addition, the Company offers communications services to inform and educate
employees about their benefit programs. The Company also offers executive
benefits consulting on non-qualified retirement plans and business continuation
plans. Moreover, one of the Company's subsidiaries offers Registered Investment
Advisory Services, including Investment Policy Statements (IPS), mutual fund
selection based on IPS and ongoing mutual fund monitoring.

Human resources services. The Company offers executive search and
placement, outplacement, organizational and management training and development,
personnel records and employment process administration, regulatory compliance
training, employment relations audits, organizational structure and executive
compensation analyses, opinion surveys, and supervisory training. The Company
expects to provide additional services, including pre-employment screening,
specialized systems such as applicant skill evaluations, customer contact
monitoring, and employee assessment and selection. The Company can assist with
the implementation of programs to strengthen both the financial and human
resources sides of the client's business. The Company has developed detailed
personnel guides, which set forth a systematic approach to administering
personnel policies and practices, including recruiting, discipline and
termination procedures. In addition, the Company will review and revise, if
necessary, personnel policies and employee handbooks or will create customized
handbooks for its clients.

Information technology consulting services. The Company offers a wide
range of information technology services, from creating strategic technology
plans to developing and implementing software and hardware solutions.
Specifically, the Company provides strategic technology planning, project
management, development of Internet/Intranet applications including Internet
security, custom software development, design and implementation of both WAN and
LAN networks, and accounting software selection and implementation. The Company
provides a methodology in which business needs drive technology, ensuring
appropriate technical solutions for the Company's small and medium sized
information technology clients.

Payroll services. The Company processes time and attendance data to
calculate and produce employee paychecks, direct deposits and reports for its
clients. The Company delivers the paychecks and reports to clients within 24 to
48 hours of the Company's receipt of the data electronically submitted from the
client. The Company's system is highly configurable to meet the specialized
needs of each client yet maintains the ability to provide high volume
processing. The system integrates easily with the client's general ledger, human
resources and time and attendance systems. In addition, the Company offers many
sophisticated features, including the automatic enrollment and tracking of paid
time off, proration of compensation for new hires, integrated garnishment
processing, escrow services and funds administration services. The Company
assumes responsibility for payroll and attendant recordkeeping, payroll tax
deposits, payroll tax reporting, and all federal, state, county and city payroll
tax reports (including 941s, 940s, W-2s, W-3s, W-4s and W-5s), state
unemployment taxes, employee file maintenance, unemployment claims and
monitoring and responding to changing regulatory requirements. The Company will
also represent the client before tax authorities in any payroll tax dispute or
inquiry.

25
<PAGE> 28

Specialty insurance services. The Company provides specialty insurance
services to approximately 6,000 clients through a network of nearly 200 agents.
The Company generally provides three categories of specialty insurance services:
commercial liability lines, surety bonds and workers' compensation coverage, and
utilizes reinsurance to limit its exposure on outstanding policies and bonds.
IASI's commercial product lines operations consist of approximately 40 different
programs for a wide variety of specialty risk groups, including (i) small
construction contractors; (ii) restaurants, bars, and taverns; (iii) small
commercial and retail establishments; (iv) sun tanning salons; and (v)
environmental contractors and professionals. IASI's surety bonding operations
consist of two major programs, contract surety bonds for construction
contractors and bonds for the solid waste industry, including waste haulers and
landfill operators. Bonds are provided to assure the performance of a contract
or the financial ability of a contractor to satisfy its obligations. The
Company's workers' compensation program consists of fully insured workers'
compensation coverage in conjunction with the services offered in workers'
compensation services. The Company utilizes several different reinsurance
programs with "A" rated insurance carriers to cover its exposure, including
"treaties" to cover all business in a defined class, and "facultative"
reinsurance to cover individual risks. IASI generally retains from zero to
$200,000 of each commercial line anticipated risk, depending on the program and
the anticipated risk.

Valuation services. The Company offers appraisal and valuations of
commercial tangible and intangible assets and valuation of financial securities.
The Company conducts real estate valuations for financing feasibility studies,
marketability and market value studies and performs business enterprise and
capital stock valuations for mergers and acquisitions, estate planning, employee
stock ownership trusts, sale, purchase or litigation purposes. The Company
assists in asset allocation issues, fixed asset insurance matters, fixed asset
tracking, specialized valuation consulting, investment transfer planning and
other valuation services.

Workers' compensation services. Each state requires employers to
provide workers' compensation coverage for employees. The Company's services
vary from state to state; however, it generally provides employers with an
integrated system of actuarial analysis and underwriting capabilities with
claims administration and has the capability to market workers' compensation
products on a national level. Professional administration can offer clients a
sizable savings by controlling the costs of premiums, claims and risks. Services
include: deductible programs available to further reduce costs, claims
preparation and filing, expert claims management and loss control, medical
referral network for employees, multi-state coverages, OSHA compliance and
record keeping, OSHA 200 logs preparation, certificates of insurance, loss
prevention strategies, free fraud investigation, safety program development
consultation, workers' compensation audits and classification analysis for
compliance.

SALES AND MARKETING NETWORK AND ACCOUNT MANAGEMENT

The Company's key competitive factors in obtaining clients for business
services are a strong existing sales network and marketing program, established
relationships and the ability to match client requirements with available
services and products at competitive prices. The Company believes that by
retaining the identity of its acquired companies, it will be able to maximize
its market penetration by combining a local entrepeneurial brand name with the
resources of a national company. The Company expects that as it expands through
internal growth and acquisitions, it will be able to take advantage of economies
of scale in purchasing a range of services and products and to cross-market new
services to existing clients who do not currently utilize all of the services
the Company offers. The Company provides its services and products through a
network of 60 Company offices in 25 states, as well as through its subsidiary
Comprehensive, a franchisor of accounting services with 250 franchisee offices
located in 42 states.

26
<PAGE> 29

In addition to the Company's traditional operations, the Company
intends to utilize its Comprehensive network of over 250 entrepreneurial
franchisee sales offices to distribute its services and products to the
Comprehensive network's more than 24,000 customers just as it utilizes its own
offices. The franchisees are able to market to their customers the broad array
of services and products offered by IASI. In the process, the franchisees have
the opportunity to enhance customer loyalty, receive compensation for additional
sales and provide additional revenue to both the IASI company providing the
service or product and to Comprehensive as the franchisor.

COMPETITION

The outsourced business services industry is a highly fragmented and
competitive industry, with a majority of industry participants (such as
accounting, employee benefits or payroll firms or PEOs) offering only one or a
small number of services. Competition is based primarily on customer
relationships, range and quality of services or product offerings, customer
service, timeliness and geographic proximity. There are limited barriers to
entry and new competitors frequently enter the market in any one of the
Company's many service areas. The Company competes with a small number of
multi-location regional or national operators and a large number of relatively
small independent operators in local markets. Some of these competitors, some of
which are public companies, may have greater financial resources than the
Company. The Company may also face competition for acquisition candidates from
these companies, many of whom have acquired a number of various types of
business service providers in recent years.

The Company believes that it will be able to compete effectively based
on its (i) broad range of high quality services and products, (ii) knowledgeable
and trained personnel, (iii) entrepreneurial culture, (iv) large number of
locations, (v) diversity of geographic coverage, (vi) operational economies of
scale and (vii) decentralized operating structure.

EMPLOYEES

As of September 30, 1997, the Company had over 800 full-time employees.
The Company believes that its relations with its employees are good.

PROPERTIES

The Company's headquarters are currently located in a 12,000
square-foot portion of an office building in Valley View, Ohio. The lease for
this property expires at the end of December 1997, subject to extension at the
option of the Company. Management intends to lease expanded office space for its
corporate headquarters in the Valley View area and anticipates that suitable
office space will be obtained as needed. The Company's subsidiaries also lease
office space in various cities in the United States. The Company does not own
any real property.

LEGAL PROCEEDINGS

The Company is a party to legal proceedings incidental to its ordinary
business operations. At present, the Company is not a party to any pending legal
proceeding that the Company believes could have a material adverse effect on the
Company's business, financial condition or results of operations.

27
<PAGE> 30

MANAGEMENT

The following table sets forth certain information as of November 11,
1997 regarding the directors, executive officers and certain key employees of
the Company. Each executive officer of the Company named in the following table
has been elected to serve until his successor is duly appointed or elected or
until his earlier removal or resignation from office. No arrangement or
understanding exists between any executive officer of the Company and any other
person pursuant to which he or she was selected as an officer.

NAME AGE POSITION(S)
<S> <C> <C>
EXECUTIVE OFFICERS AND DIRECTORS:

Michael G. DeGroote..................... 64 Chief Executive Officer, President and
Chairman of the Board
Gregory J. Skoda........................ 41 Executive Vice President, Chief Financial
Officer and Director
Edward F. Feighan....................... 50 Senior Vice President, Public Affairs
Douglas R. Gowland...................... 55 Senior Vice President, Business Integration
Keith W. Reeves......................... 40 Senior Vice President, Business Services
Craig L. Stout.......................... 48 Senior Vice President, Specialty Insurance
Services
Rick L. Burdick(1)...................... 46 Director
Harve A. Ferrill(1)(2).................. 64 Director
Hugh P. Lowenstein...................... 63 Director
Richard C. Rochon(1)(2)................. 40 Director

OTHER KEY EMPLOYEES:

Thomas J. Bregar........................ 41 Vice President, Information Technology Systems
Daniel J. Clark......................... 43 Vice President, Corporate Relations
Ralph M. Daniel, Jr..................... 41 Vice President, Payroll Administration Services
Roswell P. Ellis........................ 63 Vice President, Specialty Insurance Services
Charles J. Farro........................ 47 Vice President, Employee Benefits Design and
Administration Services
Kenneth M. Millisor..................... 60 Vice President, Workers' Compensation Services
Steven M. Nobil......................... 50 Vice President, Human Resources Services
Patrick J. Simers....................... 37 Vice President, Valuation Services
C. Robert Wissler....................... 51 Vice President, Comprehensive Business Services
Andrew B. Zelenkofske................... 37 Vice President, Accounting Systems, Advisory and
Tax Services
</TABLE>

- ------------
(1) Member of Audit Committee
(2) Member of Compensation Committee

28
<PAGE> 31

EXECUTIVE OFFICERS AND DIRECTORS:

MICHAEL G. DEGROOTE has served as the Chairman of the Board of the
Company since April 1995 and as Chief Executive Officer and President since
November 1997. Mr. DeGroote also served as President and Chief Executive Officer
of the Company from April 1995 until October 1996. Mr. DeGroote served as
Chairman of the Board, President and Chief Executive Officer of Republic
Industries, Inc. from May 1991 to August 1995. Mr. DeGroote founded Laidlaw
Inc., a Canadian waste services and transportation company in 1959. In 1988, Mr.
DeGroote sold his controlling interest in Laidlaw to Canadian Pacific Limited.
Mr. DeGroote served as President and Chief Executive Officer of Laidlaw from
1959 until 1990. Mr. DeGroote also serves as a director of RII, Gulf Canada
Resources, Inc. and Gulf Indonesia Resources Limited.

GREGORY J. SKODA has served as the Executive Vice President and Chief
Financial Officer of the Company since December 1996 and as a Director of the
Company since November 1997 and as a director and an officer of a number of the
Company's subsidiaries. Prior to the Company's acquisition of SMR & Co. Business
Services ("SMR") in December 1996, Mr. Skoda served as President and Chairman of
SMR, which he founded in 1980. Mr. Skoda is a CPA and an active member of the
American Institute of Certified Public Accountants in the Tax, Employee
Benefits, and Management Advisory Services divisions.

EDWARD F. FEIGHAN has served as a Senior Vice President, Public Affairs
of the Company since November 1997. Mr. Feighan served as Chief Executive
Officer, President and a Director of the Company from October 1996 through
November 1997. Mr. Feighan also serves as a director and an officer of a number
of the Company's subsidiaries. From 1983 until 1993, Mr. Feighan served as the
representative from the Ohio 19th Congressional District of the United States
House of Representatives. During his tenure in Congress, Congressman Feighan
served on the Judiciary and the House Foreign Affairs Committee; Chairman,
International Narcotics Control Committee; President, The Interparliamentary
Union; and permanent Representative to the Helsinki Commission. He currently
serves on the board of trustees of the National Democratic Institute for
International Affairs, and the Rock and Roll Hall of Fame and Museum.

DOUGLAS R. GOWLAND has served as Senior Vice President, Business
Integration since November 1997. Mr. Gowland served as a Director of the Company
from April 1995 through November 1997. From April 1995 until October 1996, Mr.
Gowland served as the Company's Executive Vice President and Chief Operating
Officer. From January 1992 to April 1995, Mr. Gowland served as Vice President -
Hazardous Waste Operations of RII. From March 1991 to January 1992, Mr. Gowland
served as Vice President of DRG Environmental Management, Inc. Prior thereto, he
served as President of Great Lakes Environmental Systems, Ltd.

KEITH W. REEVES has served as Senior Vice President, Business Services
since March 1997 and as a director and an officer of a number of the Company's
subsidiaries. Mr. Reeves has also served as the President of SMR since December
1996. Mr. Reeves served as Vice President of SMR from August 1984 until its
acquisition by the Company in December 1996. Mr. Reeves is a CPA and a member of
the American Institute of Certified Public Accountants and the Ohio Society of
Certified Public Accountants.

CRAIG L. STOUT has served as Senior Vice President, Specialty Insurance
Services since November 1997. Mr. Stout served as Chief Operating Officer and a
Director of the Company from October 1996 through November 1997. Mr. Stout also
serves as a director and an officer of a number of

29
<PAGE> 32

the Company's subsidiaries. Prior to joining the Company, Mr. Stout served as
President and Chairman of two other companies which he founded, Contract
Operations Planning, Inc., a surety claims management firm, and Contract Surety
Reinsurance Corporation, a reinsurance intermediary for facultative surety
reinsurance.

RICK L. BURDICK has served as a Director of the Company since November
1997, when he was elected as an outside director. Mr. Burdick has been a partner
at the law firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P. since April 1988.
Mr. Burdick serves on the Boards of Directors of RII and J. Ray McDermott, S.A.

HARVE A. FERRILL has served as a Director of the Company since October
1996. Mr. Ferrill has served as Chief Executive Officer of Advance Ross
Corporation, a company that provides tax refunding services ("ARC"), since 1991
and as President of Ferrill-Plauche Co., Inc., a private investment company,
since 1982. Mr. Ferrill served as President of ARC from 1990 to 1993 and as
Chairman of the Board from 1992 to 1996. Mr. Ferrill also serves on the Boards
of Directors of Gaylord Container Corporation and is Chairman of the Board of
GeoWaste Incorporated.

HUGH P. LOWENSTEIN has served as a Director of the Company since March
1997 when he was elected as an outside Director. Mr. Lowenstein has served as
the Founder and Chief Executive Officer of Shore Capital Ltd. (Bermuda), a
consulting and investment advisory firm, since 1994. Mr. Lowenstein served as a
Managing Director of Donaldson, Lufkin and Jenrette Securities Corporation from
1987 to 1994. Mr. Lowenstein also serves on the Board of Directors of Terra Nova
(Bermuda) Holdings Ltd.

RICHARD C. ROCHON has served as a Director of the Company since October
1996. Mr. Rochon has served since 1988 as President of Huizenga Holdings, Inc.,
a management and holding company for diversified investments in operating
companies, joint ventures, and real estate, on behalf of its owner, Mr. H. Wayne
Huizenga. Mr. Rochon also has served as a director since September 1996 and as
Vice Chairman of Florida Panthers Holdings, Inc., a leisure and recreation and
sports and entertainment company, since April 1997. From 1985 until 1988, Mr.
Rochon served as Treasurer of Huizenga Holdings, Inc. and from 1979 until 1985,
he was employed as a certified public accountant by the international public
accounting firm of Coopers & Lybrand, L.L.P.

OTHER KEY EMPLOYEES:

THOMAS J. BREGAR was named Vice President, Information Technology
Systems in November 1997. Mr. Bregar joined SMR in December 1996 to develop its
Information Technology Consulting Practice. Prior to joining SMR, Mr. Bregar was
with Price Waterhouse's Management Consulting Services Practice from 1986
through 1992, and again as Director from 1994 to 1996. In 1993, he served as
Vice President in the Information Management Services Division at Society
National Bank (now Keycorp Services).

DANIEL J. CLARK was named Vice President, Corporate Relations in
November 1997 as the Senior Vice President of Evergreen National Indemnity
Company ("Evergreen") and a director of Century Surety Company ("Century"), both
subsidiaries of the Company. Prior to joining Evergreen, Mr. Clark served as
Chief of Staff for then Congressman Edward F. Feighan from 1983 through 1993.
Mr. Clark is a member of the Ohio Bar Association and serves as a Board Member
for the Port of Cleveland.

RALPH M. DANIEL, JR. was named as Vice President, Payroll
Administration Services in November 1997. Prior to joining IASI, Mr. Daniel
served as Chairman and Chief Executive Officer of

30
<PAGE> 33

BMS, Inc. (Business Management Services), which he co-founded, from 1988 through
its acquisition by the Company in August 1997. Mr. Daniel is a CPA and serves on
the Board of the Independent Payroll and Employer Services Association.

ROSWELL P. ELLIS was named Vice President, Specialty Insurance Services
in November 1997. Mr. Ellis served as the Company's Senior Vice President -
Insurance Group from March 1997 to November 1997. He continues to serve as
Chairman and Chief Executive Officer of Century Surety Company, a position he
has held since 1987, and he is also Chairman of Continental Heritage Insurance
Company and Vice Chairman and CEO of Evergreen, all subsidiaries of the Company.
Mr. Ellis has been in the insurance business for over 35 years and holds four
professional designations: Chartered Property and Casualty Underwriter,
Chartered Life Underwriter, Associate in Claims and Associate in Surplus Lines.

CHARLES J. FARRO was named Vice President, Employee Benefits Design and
Administration Services in November 1997. Mr. Farro also serves as Chairman and
Chief Executive Officer of The Benefits Group, a subsidiary of the Company. Mr.
Farro serves on the Boards of Directors of the March of Dimes and the Akron Art
Museum.

KENNETH R. MILLISOR was named Vice President, Workers' Compensation
Services in November 1997. He is the Chairman and Chief Executive Officer of M&N
Risk Management, Inc. and the President and Chief Executive Officer of Millisor
& Nobil Co., L.P.A., subsidiaries of the Company. Mr. Millisor was admitted to
the Bar in 1961 and is an active member of the Akron, Ohio State and American
Bar Associations.

STEVEN M. NOBIL was named Vice President, Human Resources Services in
November 1997. Mr. Nobil serves as President of M&N Risk Management, Inc., a
subsidiary of the Company. Mr. Nobil serves on several Boards including the
Diabetes Association of Greater Cleveland, Baldwin Wallace College, Cuyahoga
Community College, Big Brothers and Big Sisters, American Red Cross and Grand
Prix Charities.

PATRICK J. SIMERS was named Vice President, Valuation Services in
November 1997. Mr. Simers serves as President of Valuation Counselors Group,
Inc., a subsidiary of the Company. Mr. Simers is a Certified Real Estate
Appraiser in 12 states and maintains memberships in the American Society of
Appraisers and the Appraisal Institute.

C. ROBERT WISSLER was named Vice President, Comprehensive Business
Services in November 1997. Mr. Wissler serves as President and Chief Executive
Officer of Comprehensive Business Services, Inc., a subsidiary of the Company.
He was Senior Vice President and Chief Financial Officer of Sir Speedy, Inc.
from 1978 through 1990. Prior to that time, Mr. Wissler was an auditor with
Arthur Young & Co. from 1972 to 1974, and he was a baseball player with the St.
Louis Cardinals from 1969 through 1972. Mr. Wissler is a Director of
International Franchise Association.

ANDREW B. ZELENKOFSKE was named Vice President, Accounting Systems,
Advisory and Tax Services in November 1997. Mr. Zelenkofske serves as President
of ZA Business Services, Inc., a subsidiary of the Company. Prior to joining
IASI, Mr. Zelenkofske served for several years as President and Managing
Director of Zelenkofske Axelrod and Co., Ltd. Mr. Zelenkofske is a CPA and has
been appointed to the Pennsylvania State Board of Accountancy.

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<PAGE> 34

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of Common Stock as of October 31, 1997, by (i) each person who is
known by the Company to own beneficially five percent or more of the Common
Stock, (ii) each director of the Company, (iii) certain executive officers, and
(iv) all directors and executive officers of the Company as a group. Unless
otherwise indicated, the holders of all shares shown in the table have sole
voting and investment power with respect to such shares.

NUMBER OF SHARES PERCENT
NAME BENEFICIALLY OWNED (1) OF CLASS
---- ------------------- --------

<S> <C> <C>
Michael G. DeGroote (2) ....................... 14,247,112 (3) 30.76%
H. Wayne Huizenga (4) ......................... 8,444,444 (5) 18.25%
Joseph E. LoConti ............................. 6,208,700 (6) 15.24%
Sophia Management Ltd. (7) .................... 5,347,400 (8) 12.58%
The Equitable Companies Incorporated (9) ...... 2,749,222 (10) 6.68%
Gregory J. Skoda .............................. 1,643,000 (11) 3.98%
Edward F. Feighan ............................. 1,668,800 (12) 4.05%
Douglas R. Gowland ............................ 218,600 (13) *
Keith W. Reeves ............................... 464,900 (14) 1.15%
Craig L. Stout ................................ 1,321,200 (15) 3.25%
Rick L. Burdick ............................... 62,500 (16) *
Harve A. Ferrill .............................. 63,000 (17) *
Hugh P. Lowenstein ............................ 53,900 (18) *
Richard C. Rochon ............................. 161,110 (19) *
All directors and executive officers as a group
(10 persons) .................................. 19,939,222 39.91%
</TABLE>

- -----------------------
* Less than 1%.
(1) Shares of Common Stock that are not outstanding but that may be acquired
by a person upon exercise of options or warrants within 60 days after the
date of this Prospectus are deemed outstanding for the purpose of
computing the number of shares and the percentage of outstanding shares
beneficially owned by such person; however, such shares are not deemed
outstanding for the purpose of computing the percentage of outstanding
shares beneficially owned by any other person.
(2) The address of Mr. DeGroote is Victoria Hall, 11 Victoria Street, P.O.
Box HM 1065, Hamilton, HMEX Bermuda. (3) Consists of 7,991,556 shares of
Common Stock owned of record by Westbury (Bermuda) Ltd., a Bermuda
corporation of which Mr. DeGroote is the sole stockholder, president and
director, and 6,255,556 shares of Common Stock that Westbury has the
right to acquire upon exercise of outstanding warrants.
(4) The address of Mr. Huizenga is 450 E. Las Olas Blvd., Suite 1500, Fort
Lauderdale, Florida 33301.
(5) Consists of 2,222,222 shares of Common Stock owned of record by Huizenga
Investments Limited Partnership, a limited partnership controlled by Mr.
Huizenga ("Huizenga Investments"), and 6,222,222 shares of Common Stock
that Huizenga Investments has the right to acquire upon exercise of
outstanding warrants.
(6) Consists of 1,500,000 shares of Common Stock and 252,000 shares of Common
Stock issuable upon the exercise of outstanding warrants owned of record
by Mr. LoConti; 1,100,000 shares of Common Stock and 436,800 shares of
Common Stock issuable upon the exercise of outstanding warrants owned of
record by the LoConti Family Trust; 1,000 shares of Common Stock owned of
record by Mr. LoConti's spouse; 4,500 shares of Common Stock owned of
record by a company of which Mr. LoConti is a director and sole
shareholder; 2,912,400 shares of Common Stock owned of record by Sophia
Management Ltd. ("Sophia Management"); and 2,000 options to purchase
Common Stock from the Employee Stock Option Plan ("ESOP") in 1996.
(7) Sophia Management is an Ohio limited liability company. Edward R.
Feighan, Joseph E. LoConti, Gregory J. Skoda, and Craig L. Stout and his
spouse are members.
(8) Consists of 2,912,400 shares of Common Stock and 2,435,000 shares of
Common Stock issuable upon the exercise of outstanding warrants.
(9) Such shares are owned by the Equitable Companies Incorporated and
certain of its subsidiaries. The address of The Equitable Companies
Incorporated is 787 Seventh Avenue, New York, New York 10019.
(10) Consists of 2,638,111 shares of Common Stock and 1,111,111 shares of
Common Stock issuable upon the exercise of outstanding warrants.

32
<PAGE> 35

(11) Consists of 445,600 shares of Common Stock and 335,400 shares of Common
Stock issuable upon the exercise of outstanding warrants owned of record
by Mr. Skoda's spouse; 860,000 shares of Common Stock issuable upon the
exercise of outstanding warrants owned of record by Sophia Management;
and 2,000 options to purchase Common Stock from the 1996 ESOP.
(12) Consists of 507,800 shares of Common Stock owned of record by Mr.
Feighan; 84,000 shares of Common Stock issuable upon the exercise of
outstanding warrants owned of record by Mr. Feighan; 1,075,000 shares of
Common Stock issuable upon the exercise of outstanding warrants owned of
record by Sophia Management; and 2,000 options to purchase Common Stock
from the 1996 ESOP.
(13) Consists of 108,600 shares of Common Stock and 70,000 shares of Common
Stock issuable upon the exercise of outstanding warrants owned of record
by Mr. Gowland; and 40,000 options to purchase Common Stock from the 1995
ESOP.
(14) Consists of 185,400 shares of Common Stock and 278,100 shares of Common
Stock issuable upon the exercise of outstanding warrants owned of record
by Mr. Reeves spouse; and 1,400 options to purchase Common Stock from the
1996 ESOP.
(15) Consists of 700,000 shares of Common Stock and 117,600 shares of Common
Stock issuable upon exercise of the outstanding warrants owned of record
by Mr. Stout; 400 shares held jointly with his spouse; 1,200 shares held
in a trust for the benefit of Mr. Stout's children of which his wife is
the trustee; 500,000 shares of Common Stock issuable upon the exercise of
outstanding warrants owned of record by Sophia Management; and 2,000
options to purchase Common Stock from the 1996 ESOP.
(16) Consists of 500 shares of Common Stock, 12,000 shares of Common Stock
issuable upon the exercise of outstanding warrants and 50,000 options to
purchase Common Stock from the 1996 ESOP.
(17) Consists of 7,500 shares of Common Stock owned of record by The Harve A.
Ferrill Trust U/A 12/31/69 and 5,500 shares of Common Stock issuable upon
the exercise of outstanding warrants owned of record by Mr. Ferrill's
Trust; and 50,000 options to purchase Common Stock from the 1996 ESOP.
(18) Consists of 39,000 shares of Common Stock owned of record by Mr.
Lowenstein and 50,000 options to purchase Common Stock from the 1996
ESOP.
(19) Consists of 55,555 shares of Common Stock and 55,555 shares of Common
Stock issuable upon the exercise of outstanding warrants owned of record
by WeeZor I Limited Partnership, a limited partnership
controlled by Mr. Rochon; and 50,000 options to purchase Common Stock
from the 1996 ESOP.

33
<PAGE> 36

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock is 100,000,000 shares of Common
Stock, par value $.01 per share. As of November 6, 1997, 40,058,481 shares of
Common Stock were outstanding.

Holders of shares of Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of stockholders. There
are no cumulative voting rights with respect to the election of directors.
Accordingly, the holder or holders of a majority of the outstanding shares of
Common Stock will be able to elect the entire Board of Directors of the Company.
Holders of Common Stock have no preemptive rights and are entitled to such
dividends as may be declared by the Board of Directors of the Company out of
funds legally available therefor. The Common Stock is not entitled to any
sinking fund, redemption or conversion provisions. On liquidation, dissolution
or winding up of the Company, the holders of Common Stock are entitled to share
ratably in the net assets of the Company remaining after the payment of all
creditors, if any. The outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and nonassessable. The transfer agent and registrar
for the Common Stock is Star Bank, N.A.

The Company currently has the following provisions in its charter or
bylaws which could be considered to be "anti-takeover" provisions: (i) an
article in its charter requiring the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock or two-thirds of the other
directors to remove a director and (ii) a bylaw limiting the persons who may
call special meetings of stockholders to the Board of Directors or the President
of the Company. These provisions may have the effect of delaying stockholder
actions with respect to certain business combinations and the election of new
members to the Board of Directors. As such, the provisions could have the effect
of discouraging open market purchases of the Company's Common Stock because they
may be considered disadvantageous by a stockholder who desires to participate in
a business combination or elect a new director.

The Company is a Delaware corporation and is subject to Section 203 of
the Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" with the Company for three years following the date that person
became an interested stockholder unless: (i) before that person became an
interested stockholder, the Board of Directors of the Company approved the
transaction in which the interested stockholder became an interested stockholder
or approved the business combination; (ii) upon completion of the transaction
that resulted in the interested stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the Company
outstanding at the time the transaction commenced (excluding stock held by
persons who are both directors and officers of the Company or by certain
employee stock plans); or (iii) on or following the date on which that person
became an interested stockholder, the business combination is approved by the
Company's Board and authorized at a meeting of stockholders by the affirmative
vote of the holders of at least 66-2/3% of the outstanding voting stock of the
Company (excluding shares held by the interested stockholder). A "business
combination" includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder.

34
<PAGE> 37

LEGAL MATTERS

The validity of the Shares offered hereby will be passed upon for the
Company by Akin, Gump, Strauss, Hauer & Feld, L.L.P. Rick L. Burdick, a Director
of the Company, is a partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P. See
"Principal Stockholders."

EXPERTS

The consolidated and combined financial statements of International
Alliance Services, Inc. and its subsidiaries as of December 31, 1996 and 1995,
and for each of the years in the three year period ended December 31, 1996, have
been incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder, and, in accordance therewith, files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy and
information statements and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices located at Northwest Atrium Center, Suite
1400, 500 West Madison Street, Room 3190, Chicago, Illinois 60661 and at Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained from the Commission at prescribed rates through
its Public Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants such as the Company that file electronically with the
Commission. Such material is also available for inspection at the offices of The
National Association of Securities Dealers, Inc. (the "NASD"), 1735 K Street,
N.W., Washington, D.C. 20006.

The Company has filed with the Commission a Registration Statement on
Form S-4 under the Securities Act with respect to the Shares offered hereby
(including all amendments and supplements thereto, the "Registration
Statement"). This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. For further information with respect to the
Company and such Shares, reference is made to the Registration Statement,
including the documents and exhibits filed or incorporated as a part thereof.
Statements contained herein concerning the provisions of certain documents are
not necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference. The Registration Statement and the exhibits thereto can be
inspected and copied at the public reference facilities and regional offices of
the Commission and at the offices of the NASD referred to above.

35
<PAGE> 38

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated by reference and made
a part of this Prospectus: (i) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996; (ii) all other reports filed pursuant to
Section 13(a) or 15(d) of the Exchange Act since December 31, 1996, specifically
including the Company's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997, and September 30, 1997, respectively, and the
Company's Current Reports on Form 8-K dated February 19, 1997 (as amended on
Form 8-K/A filed on April 2, 1997), April 3, 1997, April 21, 1997, and July 23,
1997 (as amended on Form 8-K/A dated October 3, 1997), respectively; and (iii)
the Company's Proxy Statement dated April 1, 1997 relating to the 1997 Annual
Meeting of Stockholders held May 6, 1997.

All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document or information
incorporated or deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also is,
or is deemed to be, incorporated herein by reference, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

The Company undertakes to provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of such person, a copy of any and all of the
documents or information referred to above that has been or may be incorporated
by reference in this Prospectus (excluding exhibits to such documents unless
such exhibits are specifically incorporated by reference). Requests should be
directed to Corporate Secretary, International Alliance Services, Inc., 10055
Sweet Valley Drive, Valley View, Ohio 44125, telephone (216) 447-9000.

36
<PAGE> 39
================================================================================

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.............................
Risk Factors...................................
Forward - Looking Statements...................
Acquisition Terms..............................
Price Range of Common Stock ...................
Dividend Policy................................
Selected Consolidated Financial Data...........
Management's Discussion and Analysis
of Financial Condition and Results of
Operations...................................
Business.......................................
Management.....................................
Principal Stockholders.........................
Description of Capital Stock...................
Legal Matters..................................
Experts........................................
Available Information..........................
Incorporation of Certain Documents
by Reference.................................
</TABLE>

================================================================================

7,729,468 SHARES

INTERNATIONAL ALLIANCE
SERVICES, INC.

COMMON STOCK

----------------------
PROSPECTUS
----------------------

,1997

================================================================================
<PAGE> 40

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") empowers a Delaware corporation to indemnify any person who was or
is a party, or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. A Delaware
corporation may indemnify past or present officers and directors of such
corporation or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the corporation to
procure a judgment in its favor under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in defense of any action
referred to above, or in defense of any claim, issue or matter therein, the
corporation must indemnify such person against the expenses (including
attorneys' fees) which such person actually and reasonably incurred in
connection therewith. Section 145 further provides that any indemnification
shall be made by the corporation only as authorized in each specific case upon a
determination that indemnification of such person is proper because he has met
the applicable standard of conduct by the (i) stockholders, (ii) board of
directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, (iii) committee of directors who are
not parties to such action, suit or proceeding designated by majority vote by
such disinterested directors even if less than a quorum, or (iv) independent
legal counsel, if there are no such disinterested directors, or if such
disinterested directors so direct. Section 145 further provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise.

The Amended and Restated Certificate of Incorporation, as amended, of
the Registrant entitles the Board of Directors to provide for indemnification of
directors and officers to the fullest extent provided by law, except for
liability (i) for any breach of director's duty of loyalty to the Registrant or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends, or for unlawful stock purchases or redemptions, or (iv)
for any transaction from which the director derived an improper personal
benefit.

Article VII of the Amended and Restated Bylaws of the Registrant
provide that to the fullest extent and in the manner permitted by the laws of
the State of Delaware and specifically as is permitted under Section 145 of the
DGCL, the Registrant shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of the Registrant, by reason of the fact
that such person is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the Registrant as a director,
officer, employee or agent of

II-1
<PAGE> 41

another corporation, partnership, joint venture, trust or other enterprise
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit, or proceeding if such person acted in good faith and in a manner he
reasonably believed to be in and not opposed to the best interests of the
Registrant, and with respect to any criminal action or proceeding, such person
had no reasonable cause to believe his conduct was unlawful. Determination of an
action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that a person did not act in good faith and in a manner such person
reasonably believed to be in and not opposed to the best interests of the
Registrant, and with respect to any criminal action or proceeding, had
reasonable cause to believe his conduct was lawful.

The Amended and Restated Bylaws provide that any decision as to
indemnification shall be made: (a) by the Board of Directors of the Registrant
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding; or (b) if such a quorum is not obtainable, or
even if obtainable, if a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or (c) by the stockholders. The
Board of Directors of the Registrant may authorize indemnification of expenses
incurred by an officer or director in defending a civil or criminal action, suit
or proceeding in advance of the final disposition of such action, suit or
proceeding. Indemnification pursuant to these provisions is not exclusive of any
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise
and shall continue as to a person who has ceased to be a director or officer.
The Registrant may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the Registrant.

Further, the Amended and Restated Bylaws of the Registrant provide that
the indemnity provided will be extended to the directors, officers, employees
and agents of any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of the Amended and Restated Bylaws with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.

The Registrant does not currently maintain a separate insurance policy
relating to its directors and officers; however, the Registrant is currently
considering purchasing and maintaining an insurance policy under which the
directors and officers of the Registrant would be insured, within the limits and
subject to the limitations of the policy, against certain expenses in connection
with the defense of certain claims, actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such claims, actions, suits or
proceedings, which may be brought against them by reason of being or having been
such directors or officers.

II-2
<PAGE> 42

ITEM 21. EXHIBITS

The following exhibits are filed as part of this Registration Statement:

Exhibit Number Description
- -------------- -----------

**4.1 Amended and Restated Certificate of
Incorporation of the Registrant (filed as
Exhibit 3.1 to Registration Statement on
Form 10, Commission File No. 000-25890 and
incorporated herein by reference)

**4.2 Certificate of Amendment to the Amended and
Restated Certificate of Incorporation of the
Registrant (filed as Exhibit 3.2 to Annual
Report on Form 10-K for the fiscal year
ended December 31, 1996, Commission File No.
000-25890 and incorporated herein by
reference)

**4.3 Amended and Restated Bylaws of the
Registrant (filed as Exhibit 3.2 to
Registration Statement on Form 10,
Commission File No. 000-25890 and
incorporated herein by reference)

*5.1 Opinion of Akin, Gump, Strauss, Hauer &
Feld, L.L.P.

*23.1 Consent of Akin, Gump, Strauss, Hauer &
Feld, L.L.P. (included in Exhibit 5.1)

23.2 Consent of KPMG Peat Marwick LLP

24.1 Power of Attorney (included in the signature
page of this Registration Statement)

--------------------------
* To be filed by amendment.
** Previously filed.

ITEM 22. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:

(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in this Registration Statement;

II-3
<PAGE> 43

(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in this Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
these paragraphs is contained in periodic reports filed with or furnished by the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;

(2) that, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and

(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the Offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(d) The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

(e) The undersigned Registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
Company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.

II-4
<PAGE> 44

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Valley View, State of Ohio, on
November 14, 1997.

INTERNATIONAL ALLIANCE SERVICES, INC.

By: /s/ GREGORY J. SKODA
----------------------------------
Gregory J. Skoda
Executive Vice President

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Michael G. DeGroote and Gregory J. Skoda, and
each of them, with the power to act without the other, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him in his name, place and stead, in any and all capacities,
to sign on his behalf individually and in each capacity stated below any or all
amendments or post-effective amendments to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on November 14, 1997.

SIGNATURE TITLE
--------- -----
<S> <C>
/s/ MICHAEL G. DEGROOTE President, Chief Executive Officer, Chairman of the
----------------------- Board and Director (Principal Executive Officer)
Michael G. DeGroote

/s/ GREGORY J. SKODA Executive Vice President, Chief Financial Officer and Director
----------------------- (Principal Financial and Accounting Officer)
Gregory J. Skoda

/s/ RICK L. BURDICK Director
-----------------------
Rick L. Burdick

/s/ HARVE A. FERRILL Director
-----------------------
Harve A. Ferrill

/s/ HUGH P. LOWENSTEIN Director
-----------------------
Hugh P. Lowenstein

/s/ RICHARD C. ROCHON Director
-----------------------
Richard C. Rochon
</TABLE>

<PAGE> 45

EXHIBIT INDEX

Exhibit Number Description
- -------------- -----------
**4.1 Amended and Restated Certificate of
Incorporation of the Registrant (filed as
Exhibit 3.1 to Registration Statement on
Form 10, Commission File No. 000-25890 and
incorporated herein by reference)

**4.3 Amended and Restated Bylaws of the
Registrant (filed as Exhibit 3.2 to
Registration Statement on Form 10,
Commission File No. 000-25890 and
incorporated herein by reference)

*5.1 Opinion of Akin, Gump, Strauss, Hauer &
Feld, L.L.P.

*23.1 Consent of Akin, Gump, Strauss, Hauer &
Feld, L.L.P. (included in Exhibit 5.1)

23.2 Consent of KPMG Peat Marwick LLP

24.1 Power of Attorney (included in the signature
page of this Registration Statement)

--------------------------
* To be filed by amendment.
** Previously filed.

<PAGE> 1

EXHIBIT 23.2

The Board of Directors
International Alliance Services, Inc.

We consent to the use of our reports incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the Registration
Statement.

KPMG PEAT MARWICK LLP

Cleveland, Ohio
November 14, 1997