ClearStar,Inc. Acquisition of SingleSource Services Corporation (9761Z)
December 17 2014 - 1:00AM
UK Regulatory
TIDMCLST
RNS Number : 9761Z
ClearStar,Inc.
17 December 2014
17 December 2014
ClearStar, Inc.
("ClearStar" or the "Company")
ClearStar Acquires SingleSource Services Corporation
ClearStar (AIM: CLST), the technology and service provider to
the background check industry, is pleased to announce that it has
purchased substantially all the assets of SingleSource Services
Corporation (the "Acquisition"), a Florida-based background
screening company ("SingleSource"), for a total consideration of up
to $4 million in cash (the "Purchase Price") excluding expenses
related to the transaction. The consideration is being funded out
of the Company's own resources and the Acquisition completed on 16
December 2014 (the "Closing Date").
Rationale for Acquisition
The Acquisition is in line with the Company's stated strategy of
growing its direct sales. SingleSource provides background
screening services directly to its customer base, which consists
primarily of faith-based organisations and retail franchisees.
SingleSource provides approximately 725,000 background checks per
year, which are generally paid for at the time of the request.
These types of organisations and companies have a large turnover of
staff and helpers and are usually required to conduct background
screening on all new employees. The combined business - utilising
ClearStar's innovative and state-of-the-art technology platform and
growing sales team - will have a wider retail offering reach and
will be well-positioned to target these opportunities.
Terms of the Transaction
The Company has acquired substantially all of the assets of
SingleSource for a consideration of up to approximately $4 million
in cash, which is payable in two tranches. The first tranche,
approximately $3.2 million (representing 80% of the Purchase
Price), was paid on the Closing Date. The remaining 20% of the
Purchase Price - approximately $0.8 million - is payable in January
2016 contingent upon target revenues generated by the SingleSource
business in 2015.
In addition, Don Dymer, the founder and owner of SingleSource,
has entered into a consulting agreement with the Company to assist
with the integration process for a period of 12 months.
About SingleSource
SingleSource was founded in 1995 by Don Dymer, a former
Inspector of Scotland Yard, as a background screening and security
firm, serving a range of organisations. The business has
subsequently expanded to provide management tools to cater for a
wide variety of human resource outsourcing requirements.
As a licensed private investigation agency in the State of
Florida, US, SingleSource conducts over 2,000 pre-employment
inquiries per day, the vast majority of which are paid for at the
time of the request.Other business-related investigative services
include due diligence inquiries relating to franchisees, vendors,
contractors and mergers.
SingleSource is a founding member of the National Association of
Professional Background Screeners and is an active member ofthe
Drug and AlcoholTesting Industry Association, Concerned CRAs,
Public Record Retriever Network, Societyfor Human Resource
Management, and several smaller regionalassociations.
Based on its financial statements for the full year ended 31
December 2013, SingleSource's revenues for 2013 amounted to
approximately $2.9 million and its net profits for the same period
totalled approximately $0.4 million.
The Board of ClearStar anticipates that there will be synergies
from the combined business that will come through in the full year
2015.
Robert J. Vale, Chief Executive Officer of ClearStar, said: "The
acquisition of SingleSource is a dramatic acceleration for
ClearStar's stated strategy of building its direct sales and I
firmly believe that this will create value for our shareholders. We
aim to make ClearStar a world-leader in cross-border background
screening and this acquisition is a key milestone that will improve
our competitive position and accelerate our commercial growth. The
Company has sufficient funding from its IPO and now has sufficient
mass to take advantage of the outstanding opportunity to exploit
the commercial potential of selling direct to corporates. We look
forward to the future with increased confidence from this
inflection point."
Don Dymer, founder of SingleSource, added: "We are delighted to
have joined forces with ClearStar. We share their vision of
becoming a leading and trusted provider of background check
services that furnish employers with reliable decision-making
information. We want to provide employers of all sizes across the
globe with intuitive systems, cutting-edge tools, and comprehensive
reports that they can use to affirm their decision to confidently
welcome individuals to their team. We look forward to building our
joint business at this exciting time for the industry."
Enquiries
ClearStar, Inc.
----------------------------------------- -----------------
Robert J. Vale, Chief Executive
Officer
David Pattillo, Chief Financial
Officer +1 770 416 1900
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Cenkos Securities plc
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Max Hartley, Michael Johnson, Corporate
Finance
Andy Roberts, Sales +44 20 7397 8900
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Luther Pendragon Ltd
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Harry Chathli, Claire Norbury +44 20 7618 9100
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About ClearStar
ClearStar, Inc. is a leading and trusted background check
technology, strategic services and decision-making information
provider to employers and background screening companies.
A seven-time Inc. 5000 honoree and founding member of the
National Association of Professional Background Screeners,
ClearStar has provided innovative technology solutions to
businesses in the human capital management industry from its
corporate offices in Alpharetta, Georgia since 1995. For more
information about ClearStar, please visit: www.clearstar.net.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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