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Acquisitions
9 Months Ended
Sep. 30, 2011
Acquisitions [Abstract] 
Acquisitions
2. Acquisitions. On July 31, 2011, the Company acquired 100 percent of HealthCare Partners (HCP), a privately-owned provider of physician staffing headquartered in Atlanta, Georgia. The primary reasons for the acquisition were to expand the Physician segment business operations geographic coverage and to leverage the Company's selling, general and administrative (SG&A) infrastructure.  The financial results for HCP from the date of the acquisition are included in the Physician segment. From the date of acquisition through September 30, 2011, revenues and net income from HCP were $4.5 million and $34,000, respectively.
 
The estimated purchase price for HCP was approximately $19.1 million consisting of the initial cash payment of $15.7 million and future estimated earn-out payments of $3.4 million (the maximum earn-out is capped at $3.7 million) based on estimated financial performance of HCP through 2013.  The estimated future earn-out payments are included in the current portion of accrued earn-outs and accrued earn-outs in the accompanying Consolidated Balance Sheets.  Transaction costs related to this transaction totaled approximately $57,000 and were included in SG&A expense. Goodwill is expected to be deductible for tax purposes. The Company utilized its existing cash and proceeds from its senior credit facility to fund the acquisition. See Note 3 for further information on the credit facility.

On February 28, 2011, the Company acquired 100 percent of Valesta, a privately-owned provider of specialized clinical research staffing headquartered in Belgium.  The primary reasons for the acquisition were to expand the Life Sciences business operations and to leverage the Company's selling, general and administrative (SG&A) infrastructure.  The financial results for Valesta from the date of the acquisition are included in the Life Sciences segment. From the date of acquisition through September 30, 2011, revenues and net income from Valesta were $14.4 million and $0.5 million, respectively. Revenues and net income from Valesta for the three months ended September 30, 2011 were $6.0 million and $0.3 million, respectively.
 
The estimated purchase price for Valesta was approximately $23.7 million consisting of the initial cash payment of $16.8 million and future estimated earn-out payments of $6.7 million (the maximum earn-out is capped at a Euro value of 5.0 million or approximately $6.8 million at September 30, 2011 exchange rates) based on estimated financial performance of Valesta through 2013.  The estimated future earn-out payments are included in the current portion of accrued earn-outs and accrued earn-outs in the accompanying Consolidated Balance Sheets.  Transaction costs related to this transaction totaled approximately $0.4 million and were included in SG&A expense. Goodwill is not expected to be deductible for tax purposes. The Company utilized its existing cash and proceeds from its senior credit facility to fund the acquisition. See Note 3 for further information on the credit facility.
 
The Company's allocation of the purchase price for HCP and Valesta is preliminary, as the amounts related to working capital and income taxes are still being finalized. Any measurement period adjustments will be recorded retrospectively to the acquisition date.
  
The following table summarizes (in thousands) our preliminary allocation, subject to finalization during the allocation period, of the purchase price for the HCP and Valesta acquisitions:
 
 

   
HCP
  
Valesta
  
Total
Current assets
 $3,941  $6,332  $10,273
Property and equipment
  123   299   422
Goodwill
  14,407   16,097   30,504
Identifiable intangible assets
  1,784   5,679   7,463
Long-term deposits
  13   26   39
Total assets acquired
 $20,268  $28,433  $48,701
             
Current liabilities
 $1,070  $4,774  $5,844
Other long-term liabilities
  49   -   49
Total liabilities assumed
  1,119   4,774   5,893
Total purchase price
 $19,149  $23,659  $42,808


 
Intangible assets allocated in connection with the preliminary purchase allocation, subject to finalization during the measurement period as necessary, consisted of the following amounts (in thousands):

 
 
Useful life
 
Intangible asset value
     
HCP
  
Valesta
  
Total
Contractor relations
2 - 3years
 $814  $266  $1,080
Customer relations
2 - 10 years
  950   2,395   3,345
Non-compete agreements
2 years
  20   440   460
Trademarks
indefinite
  -   2,578   2,578
Total intangible assets acquired
   $1,784  $5,679  $7,463

The summary below (in thousands, except for per share data) presents pro forma consolidated results of operations for the nine months ended September 30, 2011 and 2010 as if the acquisitions of HCP and Valesta occurred on January 1, 2010. The pro forma financial information gives effect to certain adjustments, including: the amortization of intangible assets and interest expense on acquisition-related debt and changes in the management fees as a result of the acquisition. Acquisition-related costs of $0.4 million and $57,000, which were expensed in the three months ended March 31, 2011 and the three months ended September 30, 2011, respectively, are assumed to have occurred in 2010. The pro-forma financial information is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future operating results.

   
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
   
2011
  
2010
  
2011
  
2010
Revenues
 $164,457  $126,412  $452,593  $346,821
Operating income
 $13,537  $7,233  $32,061  $12,120
Net income
 $7,788  $2,847  $17,252  $3,490
                 
Basic earnings per share
 $0.21  $0.08  $0.47  $0.10
Diluted earnings per share
 $0.21  $0.08  $0.46  $0.09
                 
Weighted average number of shares outstanding
  37,001   36,506   36,866   36,432
Weighted average number of shares and dilutive shares outstanding
  37,769   36,974   37,756   37,020