Select merger will shift HQ to Atlanta
One of the 10 largest staffing firms in the nation, the Santa Barbara-based Select Family of Staffing Cos., announced Jan. 5 it plans to merge with EmployBridge, a staffing company based in Atlanta.
The merger comes less than a year after Select restructured itself after declaring Chapter 11 bankruptcy and will permanently relocate the national company’s headquarters from Santa Barbara to Atlanta. Both firms, however, will continue to operate under their various subsidiary brand names.
Delia Cannan, a spokesperson for Select, said as both companies have established business under a range of brands, they will maintain this structure for the foreseeable future.
“Right now nothing is changing at all. They’re keeping operations steady,” Cannan said. “Both companies have offices throughout the U.S., so while the headquarters won’t be in Santa Barbara, they’ll have significant corporate operations there and all those will remain.”
While EmployBridge’s current CEO, Tom Bickes, will also serve as CEO of the combined company, Select executive Paul Sorensen will become the new firm’s president, while Select Staffing CEO Steve Sorensen will take a step back from management to become vice chairman of the company’s board of directors. Shawn Poole, currently president of EmployBridge, will become executive vice president and chief financial officer, while the remainder of the board of directors will consist of current Select Staffing board members.
Cannan said there is “very little overlap” in the staffing services provided by each firm, and Select hopes to bring EmployBridge’s pool of talent in warehousing, logistics and transport to its existing customers, while its administrative offerings will reach a broader market.
When the Select Family of Staffing Cos. filed a pre-packaged Chapter 11 bankruptcy on April 1, 2014, it listed between $50 million and $100 million in debts and $100 million to $500 million in assets. But that is only part of the story.
The company’s April 1 agreement with creditors amounts to a near total recapitalization. Select Staffing’s revenue approached $2 billion in 2012 and it plays a major role in providing temporary employees for the accounting, finance and information technology industries, filling some 300,000 positions each year.
One of the 10 largest staffing firms in the nation, Select was the product of a series of highly entrepreneurial moves by Sorensen, who was sent by his in-laws to open Select’s third office in Thousand Oaks in the late 1980s.
The company flourished under his leadership for 20 years but an untimely debt financing and cash-out for family members in 2007 left the company saddled with too many loans. “This is all about the financial crisis,” Sorensen told the Business Times in April after the company announced its prepackaged reorganization in bankruptcy. The bankruptcy left the Sorensen family with ownership “in the low to mid-teens” as a percentage of equity.
Terms of the Select merger with EmployBridge were not disclosed. However, the deal leaves a major headquarters staff in Santa Barbara, where its flagship has been located at an upper State Street office complex. And the two companies will operate under separate names for the foreseeable future, a statement said.