Columbus-based Elwood Staffing will buy a Salt Lake City-based competitor and will join the ranks of the top 20 largest U.S. staffing companies.
Elwood will purchase SOS Staffing Services, which will operate as an Elwood subsidiary, to expand to more than 230 locations in 33 states and Canada.
Combined, the companies generate annual revenues of more than $750 million. Elwood Staffing has set a goal of reaching $1 billion in revenue by 2015.
The acquisition will more than double the size of Elwood Staffing.
President John A. Elwood said the acquisition allows Elwood Staffing to expand geographically and obtain an expertise in new industries.
SOS operates 155 locations, he said, and in only two — El Paso, Texas, and Reno, Nev. — does Elwood also have an office.
The greater spread of offices will allow the company to respond much better to large customers that may be looking for a staffing company to serve its needs across the nation, Elwood said.
At the same time, he said, the company will continue to provide staffing needs for companies of all sizes, including small businesses.
Chief Executive Officer Mark S. Elwood said the acquisition also gives the company inroads into energy, oil and gas, transportation and construction industries, in which SOS Staffing has a significant presence. Elwood Staffing has focused primarily on manufacturing, logistics and warehousing sectors.
Mark Elwood also said that the company’s larger geographic spread and customer base — about 6,000 — will better insulate the company against a downturn in any geographic region or industry.
Combined, the companies generate just more than half their revenues in the manufacturing sector. Energy and logistics make up 33 percent. Western U.S. states generate the largest amount of revenues, with 33 percent, followed by the Midwest (28 percent) and the Southeast (24 percent). Both staffing companies are privately held and did not disclose the acquisition’s financial details.
Over the next few months, the SOS offices will be rebranded to bear the Elwood name.
Mark Elwood said that the company plans to retain a regional headquarters in Salt Lake City, where the SOS corporate employees work. That move makes sense, he said, to provide information technology, accounting and other support for the clients on the West Coast and beyond.
Nonetheless, Mark Elwood said that the acquisition bodes well for employment levels in Columbus.
Elwood employs 410 in Columbus, including corporate functions such as marketing, information technology and accounting at its headquarters at 4111 Central Ave. Mark Elwood said the local level of employment probably will increase because of the acquisition, but how many more jobs will be added was not clear yet.
Combined, the company will employ nearly 1,000 and serve more than 6,000 businesses. After the acquisition, Elwood will manage about 27,000 temporary employees daily, including about 350 in Bartholomew County.
The staffing industry has seen significant consolidation over the past few years, according to Mountain View, Calif.-based Staffing Industry Analysts, which provides advice and research to staffing companies.
SIA said on its website that the 15 largest U.S. staffing firms made up 35 percent of the market in 2008 and 44 percent in 2011. During the same span, the market share of the top five companies rose from 18 percent to 25 percent.
Elwood Staffing was founded in 1980 by David L. Elwood as Elwood Consulting. It began by providing pre-employment testing and significantly expanded its services in the 1990s. All three of his sons have joined the business. Mark Elwood joined in 1987, John Elwood followed in 1996, and Michael Elwood in 2004.
In 1997, the company was recognized as among the 100 fastest-growing businesses in Indiana by Indiana University’s Kelley School of Business.
Key acquisitions in the past decade have included Hubbuch Staffing in 2004, TRI Staffing in 2006 and Premier Staffing in 2006.