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ADMINISTAFF ANNOUNCES PLAN TO ACQUIRE CERTAIN
ASSETS OF WEB-BASED ACCOUNTING SERVICES FIRM IN CONJUNCTION WITH
WRITE-OFF OF PREVIOUS INVESTMENT
HOUSTON - December 14, 2001 -
Administaff, Inc. (NYSE: ASF), the nation's leading Professional
Employer Organization, today announced it is seeking to acquire
certain assets of Virtual Growth Incorporated (VGI), an outsourced
provider of Internet-based accounting services for small and medium-sized
businesses. The primary asset sought by Administaff is a customized
Web-based accounting software package. In addition, Administaff
plans to hire key employees from VGI's staff to continue supporting
the product.
The planned acquisition follows a filing late
yesterday by VGI for Chapter 11 bankruptcy protection. Because of
VGI's bankruptcy filing, Administaff will incur a fourth quarter
write-off of $3.7 million related to its investment in VGI over
the past two years.
"From a business strategy perspective, we are
excited about the potential to further expand the scope of Administaff's
services with this complementary product offering," said Paul J.
Sarvadi, Administaff president and chief executive officer. "We
believe this proposed software acquisition - available at a significant
discount to the total development costs - represents an opportunity
for an excellent return on our total VGI investment."
As part of the transaction, Administaff has
proposed to provide VGI with interim debtor-in-possession financing
up to a maximum amount of $600,000 to facilitate the proposed acquisition.
All transactions related to Administaff's proposal are subject to
approval by VGI's creditors and the bankruptcy court.
Administaff is a leading personnel management
company that serves as a full-service human resources department
for small and medium-sized businesses throughout the United States.
With 2000 revenues of $3.7 billion, Administaff ranks number 448
on the Fortune 500 list. In addition, Administaff is included on
Fortune's list of "America's Most Admired Companies," on the Forbes
Platinum 400 list of the best big companies in America and on the
InformationWeek 500 list of leading information technology innovators.
Administaff's Personnel Management System includes
employment administration, benefits management, government compliance,
recruiting and selection, employer liability management, training
and development, performance management and owner support. These
core services are complemented by an eBusiness strategy that includes
the Employee Service CenterSM, an interactive eService
platform that provides clients and worksite employees with information
and resources to help maximize the benefit of their Administaff
services. The Employee Service Center also features My MarketPlaceSM,
an eCommerce portal that offers value-added products and services
from best-of-class providers such as American Express, AT&T, Bank
One, Continental Airlines, Dell, IBM and Spiegel.
Administaff has 35 sales offices in 19 major
markets. For additional information, visit Administaff's Web site
at www.administaff.com.
(Note: The statements contained in this press
release that are not historical facts are forward-looking statements
that involve a number of risks and uncertainties. Therefore, the
actual results of future events described in such forward-looking
statements could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to
differ materially are: (i) changes in general economic conditions;
(ii) regulatory and tax developments; (iii) changes in Administaff's
direct costs and operating expenses; (iv) the estimated costs and
effectiveness of capital projects and investments in technology
and infrastructure; (v) Administaff's ability to effectively implement
its eBusiness strategy; (vi) the effectiveness of Administaff's
sales and marketing efforts, including the company's marketing arrangements
with other companies; and (vii) changes in the competitive environments
in the Professional Employer Organization industry. These factors
are described in further detail in Administaff's filings with the
Securities and Exchange Commission.)
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