Sale of CLP Resources to speed expansion
The acquisition of Reno-based CLP Resources Inc.
by Labor Ready Inc.
shouldn’t bring any noticeable changes to the skilled trades staffing company except for one its nationwide expansion will move a lot more quickly.
Tacoma-based Labor Ready paid about $46.2 million in cash to acquire CLP, which operates 50 locations in 24 states.
CLP provides workers in trades such as carpentry, electrical, drywall, sheet metal and masonry.
Noel Wheeler, CLP’s chief executive officer, spent last week on the road in the company’s major markets, conducting town-hall meetings with CLP employees.
But before he left, he said CLP should benefit from Labor Ready’s network of more than 830 branches that provide temporary manual labor.
“The real advantage is that it gives us access to a lot more markets across the country,” Wheeler said.”This allows us the resources to rapidly grow the business to create a national footprint.”
Before the acquisition, CLP was on a slower- paced expansion plan, entering six markets across the United States in the past year.
It had made no secret of its plan to steadily build a nationwide operation.
Selling CLP Resources were two investor groups Baird Capital Partners and William Blair Capital Partners VI, a fund managed by Chicago Growth Partners LLC and William Blair & Co.
They’d owned CLP since 1998.
Launched in the East Bay region of San Francisco in 1987, CLP has been headquartered in Reno since 1994.
While the investors knew they’d sell the company some day, the strengthening construction market helped them get a good price for CLP,Wheeler said.
The $46.2 million price tag is about seven times CLP’s operating net of approximately $6.7 million in 2004.
Wheeler said a number of other potential suitors had expressed interest in acquiring CLP, but Labor Ready was the winner because of the match between its strategic goals and those of CLP.
CLP’s customers number more than 4,500 small and mid-sized residential and commercial contractors.
Residential customers account for about 45 percent of its revenues, commercial customers for 55 percent.
Typically, CLP provides skilled tradespeople to its customers on a long-term basis.
CLP has about 10,000 tradespeople available to work.
About a third of Labor Ready’s 300,000 customers,meanwhile, are in the construction industry.
It also serves customers in manufacturing, logistics and landscaping.
“Labor Ready and CLP can now approach their existing residential and commercial contractors with a broader range of staffing solutions,” said Joe Sambataro, president and chief executive officer of Labor Ready.
Wheeler, CEO of CLP since 1999,will remain at the helm of the company, which will operate as a wholly owned subsidiary of Labor Ready.
He said few changes are expected in the operation of the Reno headquarters,which employs 65.
Labor Ready, a New York Stock Exchange company, earned $36.8 million on revenues of $1.04 billion in 2004.
The agreements are designed to split the costs of improvements such as traffic signals between Carson City and developers whose projects generate the traffic increases that trigger the need for improvements.