ASGN Incorporated (NYSE: ASGN), one of the foremost providers of information technology (IT) and professional services in the technology, digital, creative, engineering, life sciences and government sectors, announced today the acquisition of LeapFrog Systems, Inc. for up to $72.0 million in cash. The acquisition deepens and expands ASGN's capabilities in digital innovation and enterprise solutions for its financial services, insurance and healthcare clients. LeapFrog will become part of ASGN’s Apex Systems division.
LeapFrog is a specialized consultancy headquartered in Boston, Massachusetts and focused on providing enterprise-scale digital business transformation services to Fortune 500 clients. Over its 20-year history, the Company has developed a strong presence in the financial services, insurance and healthcare sectors. LeapFrog offers digital capacity on demand, including strategy and implementation services, as well as provides digital transformation consulting to organizations looking to drive modernization within their technology products and systems, while simultaneously accelerating their growth strategies. LeapFrog anticipates approximately $33.3 million in revenues for full year 2020 along with double-digit revenue growth in 2021. ASGN expects to realize revenue synergies by leveraging LeapFrog’s robust capabilities to capture an increased portion of the Apex Segment’s expanding pipeline of commercial consulting opportunities.
“I am very pleased to announce the acquisition of LeapFrog, which further enhances our commercial consulting capabilities,” said ASGN President and Chief Executive Officer, Ted Hanson. “At ASGN, we are committed to delivering value to all of our stakeholders by strategically growing our business in areas of increasing customer demand, while at the same time scaling our consultative capabilities in the key industry segments we serve. The acquisition of LeapFrog fits perfectly with each of these goals. Their industry expertise, geographic location and unique digitization services strengthen ASGN’s digital roadmap solutions. We have been witnessing an accelerating trend toward digital transformation, making now the ideal time to welcome LeapFrog to ASGN.”
As part of Apex Systems, LeapFrog will benefit from greater access to industry leading methodologies and a broader talent pool to address some of the most critical digital transformation and enterprise solutions challenges faced by Fortune 500 and 1000 companies today. LeapFrog will offer ASGN subject matter expertise and long-standing client relationships in the financial services, insurance and healthcare sectors.
“We are excited to join Apex Systems and together scale LeapFrog’s Digital Business Transformation offerings to a significantly larger group of customers,” said LeapFrog’s Chief Executive Officer, Bob Malone. “ASGN’s reputation as a fast-growing technology services firm with nationwide reach and access to over 60% of the Fortune 500 will help us grow from a regionally successful player to a national competitor. By leveraging ASGN’s just-in-time recruiting capabilities and large candidate database, we will be able to quickly scale our projects while continuing to provide the exceptional service our customers have come to expect. Both LeapFrog and Apex Systems have always revolved around doing what is in the best interests of our employees and our customers, and this transaction is no different.”
Fairmount Partners, a leading middle-market investment bank serving the needs of Consulting and Technology Services clients, served as the exclusive financial advisor to LeapFrog throughout the transaction.
Equity Grants
In addition to the cash consideration, ASGN is granting restricted stock unit awards to 14 LeapFrog employees covering approximately 42,000 shares. Subject to continued service to the company, the grants will vest: (a) one-half on the second anniversary of the grant date, and (b) 25 percent on each of the third and fourth anniversaries of the grant date. The restricted stock unit awards were granted to the employees of LeapFrog as employment inducement awards pursuant to New York Stock Exchange rules.
Legal and Financial Advisors
ASGN retained Sullivan & Cromwell LLP as legal counsel on the transaction. LeapFrog retained Choate, Hall & Stewart LLP as legal counsel and Fairmount Partners as their investment banking advisor.
About ASGN Incorporated
ASGN Incorporated (NYSE: ASGN) is one of the foremost providers of IT and professional services in the technology, digital, creative, engineering and life sciences fields across commercial and government sectors. Operating through itsApex, Oxford and ECS segments, ASGN helps leading corporate enterprises and government organizations develop, implement and operate critical IT and business solutions through its integrated offering of professional staffing and IT solutions. ASGN’s mission is to be the most trusted partner for companies seeking highly skilled human capital and integrated solutions to fulfill their strategic and operational needs. For more information, visit us at asgn.com.
About Apex Systems
Apex Systems is a world class technology services business that incorporates industry insights and experience to deliver solutions that fulfill our clients’ digital visions. We provide a continuum of service from workforce mobilization and modern enterprise solutions to digital innovation to drive better results and bring more value to our clients. Apex transforms our customers with modern enterprise solutions tailored to the industries we serve. Apex has a presence in over 70 markets across US, Canada and Mexico. Apex is a segment of ASGN Incorporated. (NYSE: ASGN). To learn more, visit www.apexsystems.com.
About LeapFrog
LeapFrog is headquartered in Boston, Massachusetts and delivers cutting-edge digital business transformation services at enterprise scale with C-Suite visibility for Fortune 500 clients. “Connected People, Connected Process, Connected Platform” form the core principles of Leapfrog’s approach, which enable and empower digital business transformation within organizations. LeapFrog has operations in Boston, Massachusetts, Irving, Texas and Raleigh, North Carolina. For more information, visit www.leapfrogsystems.com.
About Fairmount Partners
Fairmount Partners is an independent merger and acquisition advisory firm focused on emerging growth and middle market companies. Fairmount helps its clients complete mergers and acquisitions; raise funds for growth, acquisitions and liquidity; and design and improve their corporate development strategies. Fairmount’s clients include successful entrepreneurs, private equity-sponsored enterprises, and global public companies. Since 2003, Fairmount has completed more than 230 transactions, representing over $10 billion in aggregate value, in 20 countries throughout North and South America, Europe, Asia and Australia. Further information is available at www.fairmountpartners.com.
