IRVINE, Calif.--(BUSINESS WIRE)--Resources Connection, Inc., (NASDAQ: RECN), a multinational business consulting firm operating as Resources Global Professionals (‘RGP’), today announced it has signed a definitive agreement to acquire substantially all of the assets and assume certain liabilities of Accretive Solutions, Inc. (‘Accretive’) for $19.4 million in cash and 1,150,000 shares of Resources Connection, Inc. restricted common stock.
Accretive is a professional services firm headquartered in Chicago with eight offices across the United States and approximately 500 professional staff. The firm offers strong capabilities in accounting and finance, enterprise governance, business technology and business transformation, in addition to providing a back office suite of services to startups through its Countsy brand. This acquisition provides RGP with a number of key growth opportunities in the U.S., particularly in the middle market and with startup companies.
Kate Duchene, President and CEO of RGP said, “The addition of Accretive’s talented team and extensive capabilities will greatly strengthen our position in key US markets and allow us to add subscription-based services to our offerings. Accretive’s complementary business model and service offerings will also help us achieve deeper penetration with our existing clients and increase RGP’s share in the middle market – two of our key growth initiatives. We are also excited about the growth opportunities provided by Countsy, which we hope to expand into additional markets.”
This transaction is expected to increase RGP’s revenue by approximately $65-70 million and EBITDA by $6.5-7.5 million after 9-12 months. The upside to EBITDA will largely be driven by $4.5-5.5 million in cost synergies that RGP expects to achieve by the end of calendar 2018, resulting from office consolidations, the elimination of redundant back-office functions and other specific cost reductions.
Accretive will transition into the RGP brand over the next 6-9 months, with the exception of Countsy, which will continue to operate under its own brand. Certain members of the Accretive senior leadership team, including Accretive’s CEO Kerry Barrett, will remain with the organization and will support the transition and ongoing client service and business development efforts. The transaction is projected to close early in RGP’s third fiscal quarter of 2018.
The Accretive transaction follows RGP’s September 1, 2017 acquisition of taskforce – Management on Demand AG, a German professional services firm that provides clients with senior interim management and project management expertise.
Herb Mueller, CFO of RGP said, “Together, these two transactions support RGP’s strategic initiatives by adding scale in key markets, introducing new capabilities and enhancing our ability to grow business with new and existing clients. They are expected to drive RGP’s topline performance and create further value for our shareholders.”
ABOUT RGP
RGP, the operating subsidiary of Resources Connection, Inc. (NASDAQ: RECN), is a multinational business consulting firm that helps leaders execute internal initiatives. Partnering with business leaders, RGP drives internal change across all parts of an enterprise – accounting; finance; governance; risk and compliance management; corporate advisory; strategic communications and restructuring; information management; human capital; supply chain management; and legal and regulatory.
RGP was founded in 1996 within a Big Four accounting firm. Today, RGP is a publicly traded company with over 3,200 professionals, annually serving over 1,800 clients around the world from 69 practice offices.
Headquartered in Irvine, California, RGP has served 87 of the Fortune 100 companies.
The Company is listed on the NASDAQ Global Select Market, the exchange's highest tier by listing standards. More information about RGP is available at www.rgp.com. (RECN-F)
Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “remain,” “should” or “will” or the negative of these terms or other comparable terminology. Such statements and all phases of the Company’s operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties that may or may not be realized include certain anticipated benefits of the acquisition such as our ability to recognize certain growth opportunities and achieve deeper penetration in the U.S. middle market and with startup companies, our ability to greatly strengthen our position in key US markets and add subscription-based services to our offerings, our ability to exploit the Countsy brand to expand into additional markets, our ability to achieve our revenue, EBITDA and cost synergy expectations, as well as seasonality, overall economic conditions and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K and our other public filings made with the Securities and Exchange Commission (File No. 0-32113). Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or operating results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not intend, and undertakes no obligation, to update the forward-looking statements in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless required by law to do so.
