With the labor market slowly but surely improving, this seems like a great time for a company like On Assignment, Inc. (ASGN - Snapshot Report) to make some kind of move. So yesterday, the temporary employment services company announced that it would be buying Apex Systems Inc., the sixth largest IT staffing firms in the country.
The $600 million transaction is expected to close in May. It will create one of the biggest staffing companies in the U.S. The deal should be significantly accretive to ASGNs EPS in 2012 and beyond.
The transaction seems to be getting the thumbs up from the market, as shares of On Assignment soared more than 26% Wednesday. That easily put the company at the very apex of the Zacks #1 Rank Top Performers List. In fact, it was more than three times better than the runner up.
ASGN was doing quite well for itself before this acquisition, as its Zacks #1 Rank attests. The Zacks Consensus Estimate for 2012 is 80 cents per share, which is up 12.7% in two months. In that same period of time, the Zacks Consensus Estimate for 2013 advanced 12.3% to 91 cents.
At the moment, analysts are expecting profit growth of nearly 14% for 2013 over 2012.
Last month, ASGN reported fourth-quarter earnings per share of 20 cents, which was 25% better than the Zacks Consensus Estimate of 16 cents. Revenues soared 34% to $161.8 million.
The company has an excellent record of outperforming quarterly profit expectations. As the graph below shows, it has now beaten for seven consecutive quarters. Put another way, it has beaten in nine of the past ten quarters.
ASGN is a leading global provider of highly skilled, hard-to-find professionals in the growing life sciences, healthcare, and technology sectors, where quality people are the key to success.