Sitrick Sells Firm to Professionals Services Group
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Sitrick Sells Firm to Professionals Services Group

Resources Connection, a professional services firm best known for its work in change management, has acquired Los Angeles-based strategic communications firm Sitrick and Company and restructuring specialist Brincko Associates.

Paul Holmes

IRVINE, CA—Resources Connection, a professional services firm best known for its work in change management, has acquired Los Angeles-based strategic communications firm Sitrick and Company and restructuring specialist Brincko Associates to form a corporate advisory and restructuring subsidiary to be known as Sitrick Brincko Group. The deal marks the second time—following the sale of FD to FTI Consulting—that a leading corporate and financial communications specialist has sold to a larger management consulting firm.


Sitrick founder Michael Sitrick will be chairman and CEO of the new subsidiary and will report directly to Donald Murray, chairman and CEO of Resources. John Brincko will serve as president and chief operating officer of the new operation.


The acquisitions 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 which will be valued at the price of Resources' stock on the date the transaction closes, plus an earn-out based on the achievement of earning levels over a period of four years from the date of closing.


Under the terms of the acquisition agreement, employees of the new subsidiary would share in up to 20 percent of the earnout based upon the achievement of certain growth targets.

Sitrick, with offices in Los Angeles, New York, San Francisco and Miami, specializes in corporate, financial, transactional and crisis communications. The firm has managed the strategic communications for approximately 300 companies in Chapter 11 including Delphi, Conseco, Collins & Aikman, Federal-Mogul, Global Crossing, Interstate Bakeries, Laidlaw, Mirant Corporation, Purina Mills, US Airways, America West Airlines, Barneys New York and Worldcom. This year, the firm is handling or has handled 15 Chapter 11 cases and five out-of-court restructurings.


Headquartered in southern California, Brincko Associates is an international management consulting firm that has managed such restructurings as Barneys New York, Consolidated Freightways, Knudsen Foods and Sun World International and is currently working with Spansion.


According to Murray: "Strategically, the acquisition of the business of Sitrick and Company augments Resources' ‘first in’ capabilities as corporate issues arise and require immediate communication strategy formulation and execution. In such situations, companies often require significant assistance to react proactively to the business issues at hand. Such matters include business and financial restructuring, dispute resolution assistance, interim senior-level management or forensic accounting assistance.


"All one has to do is to read the daily headlines to see why we are so excited about this acquisition. Despite predictions that the recession is over, the business landscape remains littered with troubled companies and indeed whole industries. The constricted financing environment over the past couple of years has further exacerbated these problems and deepened the pipeline of troubled companies. We believe this transaction provides significant opportunities for growth."


From Sitrick’s point of view, Resources—with over 2000 consultants and 82 locations throughout the world—will enable the PR firm to draw on highly-qualified accounting, human resources and IT professionals. Says Sitrick: “I have had many opportunities to sell or merge my business over the years but chose to stay independent. This combination gives me an opportunity to not only partner with one of the most respected people in the corporate advisory and restructuring business, but to operate on a global platform utilizing the outstanding professionals of Resources Global. Most importantly, it provides both John and me with the opportunity to provide real added value to clients and potential clients on a global basis."


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.


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