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Friday, Mar 29, 2024

ASGN Chief Terminated Amid College Inquiry

The share price of ASGN Inc. has dropped since the announcement that company terminated its chief executive Peter Dameris as he was being investigated as part of the college admissions scandal. The Calabasas staffing firm caters to clients in the information technology, digital content and life sciences markets. It announced June 20 that it ended Dameris’ employment. The share price had dropped $1.06 in the four days following the announcement, or about 2 percent. Shares later recovered and closed on July 2 at $59.14. The overall market was down just less than 1 percent over that same span. Dameris had resigned from the firm April 30, stating that it was for family reasons related to the health of his son. Theodore Hanson, who had been president, took on the duties of chief executive. Mark Marcon, a senior research analyst who follows ASGN at Robert W. Baird & Co., said in a research note from April that it was saddening to see Dameris leave. He was an exceptional chief executive who was seen as someone who created a sustainable business model capable of delivering strong shareholder returns, Marcon wrote. “Those who closely follow the company were aware of Mr. Dameris’ youngest son’s battle with cancer, so while the transition announcement is a surprise, the rationale is not,” Marcon wrote in the note. Hanson’s eventual succession to the chief executive position had been no secret as he has increasingly taken a bigger role in managing operations and engaging with the investor community over the past 12 to 18 months, Marcon continued. “It seems like the transition should be a smooth one as Mr. Hanson was intimately involved with the planning and strategy encompassed in ASGN’s five-year plan,” the research note said. Legal negotiations In May, however, the firm said in a federal filing that Dameris’ “resignation was the subject of negotiations between his counsel and the United States Attorney’s Office in Boston, Massachusetts, which has been investigating Mr. Dameris as a target in connection with the college admissions investigation.” The company did not specify what Dameris’ alleged involvement in the admissions scandal may have been. In March, dozens of wealthy parents, including two Hollywood actresses and prominent business figures, were charged by federal prosecutors for allegedly paying bribes to obtain fake entrance-exam scores and bogus athletic achievements to get their children into elite colleges, including USC, UCLA and Stanford University. Prior to joining ASGN, then known as On Assignment Inc., in 2004, Dameris had been chief executive of Metamor Worldwide, a publicly traded information technology staffing and consulting company acquired by PSINet, an internet service provider, in 2000 for $1.9 billion. Marcon noted in his research note that during Dameris’ tenure at ASGN, the firm has executed well, has among the highest margins in the industry and has positioned itself in a number of attractive sub-segments. Dameris also oversaw some highly lucrative acquisitions – Apex Systems Inc. in 2012; Creative Circle in 2015; ECS Federal in 2018; and DHA Group Inc. earlier this year, which was folded into the ECS Federal business unit. During that time the company also sold off its physician staffing segment, VISTA Staffing Solutions Inc. Growth plans Dameris was asked during a conference call in April with analysts to discuss first-quarter results about the company’s growth plans. The company’s available capital competes internally for whatever is best long-term for shareholders, be it acquisitions, stock repurchase or repayment of debt, Dameris said. “Our focus on acquisitions remains to get one, ECS, to $1 billion in revenue in the next three to four years and two, to see if we can find … a good partner for Apex to help them as they continue to build out the rest of (its) business,” he explained. ECS of Fairfax, Va., is a government services contractor delivering artificial intelligence, cyber security, cloud computing and advanced science and engineering services to commercial and government enterprises ECS Federal President George Wilson said during the conference call that first-quarter revenue was $168 million, a 13 percent increase over the same period a year earlier. The unit had a backlog of $1.5 billion in contracts it was waiting to hear back on, he added. “Some recent awards contributing to our growth include our project to support the U.S. Postal Service in both cybersecurity and digital transformation,” Wilson said. “We also began work during the first quarter under a key cybersecurity effort with the FBI.”

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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