AccuStaff sells health division
By Mark Basch
Times-Union business writer
AccuStaff Inc., which has expanded rapidly through acquisitions
over the last few years, announced yesterday it is shedding a business.
The Jacksonville-based business services company said it sold
its health care division, which provides home health care and
supplemental staffing services, to Cincinnati-based CommuniCare Health
Services Inc.
Terms of the deal were not disclosed, but AccuStaff said the
sale would be slightly accretive to AccuStaff's overall earnings in
1998. The health care division generated revenues of $116.3 million last
year and about $30 million in the first quarter this year. AccuStaff had total revenues of about $2.4 billion last year.
The health care division was part of Career Horizons, a company that AccuStaff acquired in November 1996, but AccuStaff said it wasn't really interested in that particular division. ''It was never a core competency of Career Horizons,'' said Derek E. Dewan, AccuStaff chairman
and chief executive officer.
The division was profitable but its profit margin was low and it didn't meet AccuStaff's expectations, Dewan said.''It was a very cost-intensive business,'' he said.
The division, called Health Force, has 71 offices but none in Jacksonville. Analyst Daniel F.D. McKinley said it is no surprise that AccuStaff sold the health care division.''Health care has been sort of the stepchild of the staffing industry,'' McKinley said. ''It has been a non-growth sector of the business.'' Dewan said the sale of the business will help AccuStaff focus on its core competencies, including its rapidly growing information technology business. That business, which operates under the name modis inc., is expected to generate more than $1.2 billion in revenues alone this year.
Eliminating the health care division will improve
AccuStaff's overall profit margins, Dewan said. But even with that
division during the first quarter, AccuStaff's earnings will ''clearly beat'' analysts' consensus forecast, he said. Analysts have been projecting earnings of 27 cents a share for the
first quarter. In the first quarter of 1997, AccuStaff earned $21.4 million,or 21 cents a share.
The earnings report is scheduled to be released at the end of April.
''People should be very pleased,'' Dewan said.
AccuStaff's stock rose 1 5/8 to 35[fr9/16] yesterday. |
