Private equity firm acquires Surge Resources, a New England-based PEO
Private equity firm GPB Capital Holdings LLC acquired a majority stake in Manchester, NH-based professional employer organization Surge Resources. The transaction closed Oct. 30.
Surge targets small and medium-sized businesses located in New Hampshire, Massachusetts, Vermont and Maine. New York-based GPB will provide capital as well as strategic and operational assistance to help Surge expand its presence in New England.
The acquisition follows GPB’s acquisition in January of Jacksonville, Fla.-based PEO MatrixOneSource, its first foray into the PEO sector.
Surge provides PEO services to more than 150 companies with approximately 2,700 employees. The acquisition “creates a PEO platform in New England for GPB Capital to integrate ‘tuck-in’ acquisitions going forward,” said GPB Capital Founder and CEO David Gentile.
“The addition of Surge, along with MatrixOneSource, will help drive towards our goal of a creating a national PEO platform which can offer a robust suite of human resources and administrative services to small- and medium-sized, growth-focused companies at a time when employment regulations continue to evolve and increase in complexity,” said Abhaya Shrestha, managing partner at GPB Capital responsible for the firm’s business services strategy.
PEOs are part of Staffing Industry Analysts’ “Workforce Solutions Ecosystem” — SIA’s method for defining the industry, including the various players that provide contingent workers and support companies that both use and supply those workers. An updated version of the ecosystem was released in October.
Freelancer.com buys online freight platform; creates Freightlancer.com
Freelancer Ltd., the operator of online staffing firm Freelancer.com, acquired Channel 40, an online marketplace that connects freight owners with transport operators. Freelancer.com said the acquisition paved the way for the launch of Freightlancer.com.
The transaction closed Nov. 19; terms were not disclosed.
Channel, with 10 internal employees, counts more than 6,000 freight operators in its marketplace and primarily targets the construction, mining, tunneling, rail and oil & gas industries. In the last 12 months, Channel 40 has shipped more than $4.5 million of freight within Asia Pacific, as well as internationally to the US and Europe.
Mining executive Tom Cavanagh started the company in 2016; he is also the founder and CEO of EMS Group, one of Australia’s largest underground mining and tunneling service providers.
The Freightlancer.com platform will provide freight, shipping and transportation services ranging from complex enterprise haulage to consumer metro deliveries.
“The acquisition of Channel 40 and the launch of Freightlancer.com represent the first productized vertical for Freelancer.com, specializing in end-to-end solutions within a single job area,” said Freelancer.com Chief Executive Matt Barrie. “This builds on our Local Jobs offering and taps into the Freelancer.com API, delivering a global pool of liquidity for the freight logistics industry, around the world.”
IT staffing provider TSR delays annual meeting amid shareholder suits
IT staffing provider TSR Inc. (NASD: TSRI) postponed its annual meeting of stockholders, originally scheduled for Nov. 28, as it confronts both a proxy battle and two lawsuits. A new meeting time is still to be announced.
The board said additional time is needed to review and respond to proposals from Zeff Capital LP, its largest shareholder, and for its special committee to complete its evaluation of strategic alternatives, which include a possible sale of the Hauppauge, NY-based company.
The board also noted litigation brought against the company and its directors by investor Fintech Consulting LLC; and against the company and its current and certain former directors by minority shareholder Susan Paskowitz.
Zeff Capital, which last year sought to acquire all the shares in TSR, last month notified the company of its intention to nominate two independent director candidates for election to TSR’s board at the annual meeting of stockholders: Tim Eriksen and Brad Tirpak. The investor in July upped its stake in the company by purchasing the shares held by TSR Founder Joseph Hughes and his wife, Winifred.
Subsequently, TSR in August adopted a stockholder rights agreement, sometimes referred to as a “poison pill,” to thwart a potential hostile takeover.
On Nov. 1, TSR was served with a complaint filed by stockholder Fintech Consulting LLC, which purports to be a stockholder derivative lawsuit on behalf of the company against all current members of the board of directors. Fintech claims that the board breached its fiduciary duties by approving certain anti-takeover measures.
And on Oct. 16, TSR was served with a complaint filed by stockholder Susan Paskowitz that purports to be a class action lawsuit asserting claims related to the sale of the Hughes’ shares. Paskowitz also asserts that the Zeff Group aided and benefited from the Hughes’ conduct and may ultimately be aimed at buying out the remaining shares at an unfair price.
Proposed change in temp-worker H-2B and H-2A visa advertising rule
Employers seeking temporary nonagricultural workers through the H-2B visa program would be required to post advertisements for the jobs online for at least 14 days under a rule proposed by the US Department of Labor and the US Department of Homeland Security. This would replace a current rule that requires employers to advertise such positions in two newspaper print ads.
The Department of Labor simultaneously proposed a similar rule for temporary agricultural workers obtained through the H-2A visa program.
The Department of Labor’s Employment and Training Administration’s Office of Foreign Labor Certification determines whether American workers are available to perform the jobs for which employers seek foreign workers. One way the department determines the availability of American workers is by requiring employer applicants for foreign labor certification to actively recruit American workers.
The labor department said Internet-based advertising would help American job seekers identify available job opportunities. And the longer posting period of 14 days would provide more time for workers to learn of job opportunities.
US Rep. Dan Newhouse, R-Wash., who represents a district with many tree fruit growers using H-2A workers, told agricultural website Capital Press that modern recruitment practices are long overdue; the proposed rule will save farmers millions of dollars in print advertising. Farmers could still advertise in print but it would not be required, he said.
“Although a grower may spend more than $5,000 on the required print media advertising, it is rare that a potential domestic worker reads the paper and applies for an open position,” Newhouse said.
Big tech jobs are ‘$100,000-a-year welfare’: Y Combinator exec — Staffing quote of the week
Michael Seibel, who leads startup incubator and investment firm Y Combinator, advised more than 2,000 engineering students gathered for an app-building competition at University of California, Berkeley, to avoid jobs in big tech. “The worst thing that can happen to you is you get a job at Google,” Seibel said. The New York Times said he called those jobs “$100,000-a-year welfare” — meaning, he said, that workers can get tethered to the paycheck and avoid taking risks.
US at full employment, Fed study finds (Bloomberg)
Bloomberg reported the US labor market has little room to tighten, according to a new study from the Federal Reserve Bank of San Francisco that examines trends in the number of Americans who are either working or looking for jobs. “Our estimates indicate that the aggregate labor force participation rate is at its trend as of 2018,” the regional Fed bank concluded in an Economic Letter published Monday. “Combined with the low unemployment rate, this argues that the US labor market is operating at or beyond its full potential.”