Resources Connection acquires firms, forming restructuring subsidiary

The acquisitions, which include the purchase of certain assets of both Sitrick And Company and Brincko Associates, and the personal goodwill of Michael Sitrick, CEO of Sitrick and Company, will be made for aggregate initial consideration of $43.3 million, comprising $28.2 million in cash and approximately 810,000 shares of restricted stock.

The transaction is subject to customary closing conditions and is expected to close within the next 30 days. The principal acquisition agreement provides that the employees of the new subsidiary would share in up to 20 percent of the earn-out based upon the achievement of certain growth targets.

Following the closing, this new Resources subsidiary will be called Sitrick Brincko Group, LLC. Michael Sitrick will be Chairman and CEO of the new subsidiary and will report directly to Donald B. Murray, Chairman and CEO of Resources. John Brincko will be President and COO of the new subsidiary.

Sitrick And Company, with offices in Los Angeles, New York, San Francisco and Miami, specializes in corporate, financial, transactional and crisis communications. It was founded in 1989. Headquartered in Southern California, Brincko Associates is an international management consulting firm established in 1979.

Don Murray, Resources Connection Executive Chairman & CEO, said the transaction, which is expected to be immediately accretive, will make Resources a meaningful player in the corporate advisory and restructuring market.

"Brincko Associates brings significant, added expertise in each of these areas to Resources. By combining the specialized skill sets of these two businesses with Resources' consultant capabilities, geographic footprint and client base, we believe we will greatly increase our ability to assist clients during challenging periods in a more cost effective manner than currently offered by traditional consulting firms," Murray said.

In addition to its strategic communication counseling in restructuring cases, the Sitrick firm has been involved in a wide spectrum of matters including mergers and acquisitions, proxy contests, withhold vote contests, product recalls, business litigation of all kinds - from patent infringement suits to allegations of stock manipulation, financial restatements and write-downs, state and federal government investigations, criminal indictments, insurance fraud, labor issues (including emergency executive transitions, sexual harassment and sex discrimination cases), fraudulent conveyance cases, trade disputes, environmental issues and product liability claims.

Brincko Associates, in addition to restructuring services, debtor representation, liquidation management and business dissolution management, provides such other services as customer, vendor and employee relations consulting, crisis management, financial structure analysis, cash management, interim management, complex negotiations, risk assessment, cost reduction and seller representation.

For the twelve months ended December 31, 2008 and the six months ended June 30, 2009, Sitrick And Company and Brincko Associates had combined revenue of approximately $24.4 million and $14.4 million, respectively, and adjusted EBITDA of $10.5 million and $6.6 million, respectively. Adjusted EBITDA represents EBITDA adjusted for certain expenses which are not anticipated to recur post-transaction.

In connection with the acquisition, at the closing, Michael Sitrick and John Brincko will enter into a 54-month employment contract with the Resources subsidiary.