Shares of Salt Lake-based SOS Staffing Services plummeted by almost 50 percent Thursday after the company agreed to merge with an Oregon staffing firm.
Assuming shareholder approval, the Salt Lake company will become a wholly owned subsidiary of Hire Calling Holding Co.
SOS provides commercial staffing and employment-related services. Hire's affiliate, Hire Calling Inc., provides a similar service in the Pacific Northwest.
According to the terms of the agreement, Hire will own 100 percent of SOS's outstanding common stock, paying shareholders about $1.37 per common share, or up to $3.5 million total. Following the merger, SOS Staffing will no longer be publicly traded.
SOS stock closed Thursday down $1.29, or 49 percent, at $1.35 per share on the Nasdaq SmallCap Market. In the past year, the price has ranged from $1.10 to $4.05.
As part of the merger, Hire has agreed to pay to retire all of SOS's outstanding debt and will collateralize the company's workers' compensation program.
"We're very pleased with the company we're merging with, in terms of their corporate culture and their method of doing business," said SOS chief executive JoAnn Wagner. "At the same time, our company will go forward here as a Salt Lake-based staffing company.
"For our clients and employees, and our branch network offices throughout the Western states, things should be business as usual. But this merger capitalizes the company with whole new backing."
SOS includes 350 staff employees and about 60,000 field employees, Wagner said. The company operates 75 offices in 13 states.
No post-merger staff reductions are planned, Wagner said, and service to clients is not expected to be interrupted. The board of directors already has approved the transaction, which now will go before shareholders. A vote is expected in late October.
SOS Staffing completed a 5-to-1 reverse stock split last month in an effort to keep its Nasdaq listing. Also last month, the company reported a net loss of $272,000, or 2 cents per share, for the quarter ended June 29. That compares with a loss of $1.4 million, or 11 cents per share, for the same period a year ago.
Service revenues totaled nearly $42 million, down from $46.3 million a year ago.
For the first half of 2003, the company had a net loss of $1.6 million, or 13 cents per share, on service revenues of $77.8 million.