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Corporate Resource Services, Inc. Agrees To Acquire Summit Software

Stocks in this article: CRRS

Corporate Resource Services, Inc. (OTCBB: CRRS), a diversified staffing, recruiting, and consulting services firm providing managed services and trained employees in the areas of Insurance, Information Technology, Accounting, Legal, Engineering, Science, Healthcare, Life Sciences, Creative Services, Hospitality, Retail, General Business and Light Industrial work, today announced the completion of negotiations to purchase the Summit Software division of Tri-Tel Communications, Inc. The acquisition is expected to close once the customary approval requirements and closing conditions have been met.

“With the acquisition of Summit Software, we are taking an important step in executing Corporate Resource Services’ strategic plan,” said John Messina, the Company’s CEO. “Summit is one of the premier software companies focused on the PEO industry. Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. With healthy profit margins and excellent opportunities for growth, Summit’s technology touches millions of people through more than 270 PEO and other clients and their base of customers. While maintaining the privacy of those customers and all of their respective employees, we believe that we can partner with our clients to transform Summit’s application into a predictable marketing channel and create another revenue stream.”

“I am excited about CRS’ strategic vision and the role Summit will play in its execution,” said Sean Flanagan, President of Summit Software. “We have begun our development efforts to refine the software and its demographic criteria as well as create the technology to send and track offers from our marketing partners. We are confident that we can have a working prototype of this system in the first half of 2013.”

“The improvement in our profit margins is a key factor in our strategic plan,” said Mike Golde, CFO of Corporate Resource Services. “We have invested in our professional services business, particularly in accounting, finance and IT, and we are experiencing superior growth of these services as a result. This business typically generates margins comparable to those reported by some of our well-known public competitors such as Robert Half International Inc. (NYSE:RHI). However, we also believe that there are excellent growth opportunities for all of our areas of specialty, including light industrial work, which typically generates lower margins. While we will continue to focus on adding higher-margin business and shift our overall business mix as a result, we don’t want to sacrifice the growth we are experiencing in light industrial and managed services. We agree with the views expressed by some financial commentators that the Affordable Care Act (commonly known as “Obamacare”) will drive demand for temporary services. We believe that the growth generated by Obamacare compliance will likely be significant with respect to lower-skilled labor.”

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