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SNELLING PERSONNEL SERVICES
THE DALLAS MORNING NEWS
February 5, 2005 Saturday
Dallas staffing firm sold to NY investor
STEVE QUINN, Staff Writer
Dallas staffing firm Snelling Personnel Services has been sold to a New York asset management company, ending its 54-year run as a privately held family business.
Linda Paulk, a third-generation family member operating the company, said the sale to Patriarch Partners LLC makes good business sense as the $63 billion staffing industry recovers from several sluggish years and enters another growth cycle. Terms of the deal finalized late Thursday were not disclosed.
"We wanted to do whatever we could to provide an infusion of capital to ride the crest," said Ms. Paulk, who will stay on as president and chief executive of the company, which will remain in Dallas.
"We are coming off an interesting time with the telecom collapse, accounting scandals and 9-11, and the staffing industry is slated to be among the top five fastest-growing industries."
Lynn Tilton, founder of 5-year-old Patriarch Partners, said she became interested in Snelling when one of her portfolio managers recommended the investment.
Patriarch plans to make Snelling the foundation of a projected $1 billion staffing division, says Ms. Tilton. Patriarch's other holdings include Galey & Lord Inc., a denim manufacturing company in Atlanta, and W.W. Holdings LLC, an Ohio door and hardware company.
Snelling, which had $338 million in revenue for 2003, has 210 company and franchise-owned branch offices nationwide. It employs about 150 people in the Dallas area and 300 nationwide.
Snelling is an ideal start for the Patriarch division because it doesn't need to be fixed, Ms. Tilton said.
"Usually you have to change the entire business model and strategic directions, but I don't have to do that here," said Ms. Tilton, whose company manages assets worth $4.5 billion. "Snelling is not undergoing industry changes that are going to make the company obsolete in the United States."
Ms. Tilton said she didn't want to move Snelling from Dallas, its home of 13 years since moving from Sarasota, Fla. There will eventually be some workforce changes, but there are no plans to "slice and dice," she said.
"We are going to examine everybody's role," she said. "That's what you do when you buy a company. But, if anything, we will be adding because we intend to grow."
Growth with be organic as well as through acquisitions of smaller firms, but the Snelling name will remain, a move staffing executives and analysts say makes sense.
"They are buying a brand name, which is a good asset," said Chuck Jackson, president of Irving-based Corporate Resource Staffing. "The name Snelling has a lot of clout."
Selling to an investment firm rather than merging with another staffing company is not unusual, says Sam Sacco, a mergers consultant and partner with R.A. Cohen Consulting of Wilmington, N.C.
"We are seeing more private investors because the industry is picking up and proving to be profitable in the past as long as the economy is steady," he said. "It's a good time to strike."
Snelling was founded in 1951 by Lou and Gwen Snelling, who included sons Bob (Ms. Paulk's stepfather) and Ray, and daughter-in-law Joan in the operations.
Among the 86 staffing companies with $100 million or more in revenue, Snelling ranks 34th nationally, according to a September 2004 study by the newsletter Staffing Industry.
E-mail squinn@dallanews.com
SNELLING PERSONNEL
Founded: 1951 in Philadelphia
Headquarters: Dallas
President: Linda Paulk
Business: Supplies 5,000 to 6,000 companies with temporary or contract workers
Revenue: $338 million in 2003, the latest figures released
Number of offices: 210
Employees: 150 in Dallas, 300 nationwide |
