ASGN Incorporated to Acquire TopBloc, A Preferred Workday Services Partner

Rhea-AI Summary

ASGN Incorporated (NYSE: ASGN) has announced a definitive agreement to acquire TopBloc, a Workday consultancy, for $340 million in cash and equity. The transaction is expected to close in Q1 2025.

TopBloc, founded in 2016 and based in Chicago, provides Workday deployment services and support for human capital, financial, and payroll management. With over 300 Workday installations in five years and 500+ consultants, TopBloc will join ASGN's Consulting Services.

TopBloc is projected to generate approximately $150 million in revenues for 2025, representing over 20% year-over-year growth, with EBITDA margins in the high teens. The company serves six industry verticals and will be immediately accretive to ASGN on an adjusted basis.

Positive

• Acquisition provides immediate entry into $160B Workday market
• TopBloc projected revenue of $150M in 2025 with 20%+ YoY growth
• High teens EBITDA margins expected for 2025
• Immediately accretive to ASGN earnings
• Addition of 500+ experienced consultants to workforce
• Access to growing enterprise cloud applications market

Negative

• Significant cash and equity outlay of $340M for acquisition
• Integration risks with 500+ new employees
• Subject to regulatory approval (HSR)

Insights

Financial Analyst

The $340 million acquisition of TopBloc represents a transformative deal for ASGN, valued at approximately 2.3x projected 2025 revenue. This multiple appears reasonable given TopBloc's impressive 20%+ growth rate and high-teens EBITDA margins, positioning it above industry average profitability metrics.

The deal's financial structure demonstrates strategic prudence. Using a combination of cash and equity helps preserve ASGN's balance sheet flexibility while aligning TopBloc's interests with ASGN's long-term success. The immediate earnings accretion suggests effective deal pricing and strong synergy potential.

TopBloc's projected $150 million revenue contribution represents approximately 4% of ASGN's current market cap, but the strategic value extends beyond pure financials. The acquisition provides ASGN entry into Workday's ecosystem, which boasts 15.8% subscription revenue growth and serves 60% of Fortune 500 companies. This positions ASGN to capture a larger share of the $160 billion ERP market.

Three key value drivers make this acquisition particularly compelling:

• Cross-selling opportunities across ASGN's existing commercial and government client base
• Expansion into higher-margin consulting services
• Enhanced competitive positioning in the growing Workday implementation market

The integration of TopBloc's 500 consultants into ASGN's Consulting Services should drive operational efficiencies and enable rapid scaling of the Workday practice. While integration risks exist, the cultural alignment and complementary client bases mitigate execution concerns.

Technology Industry Analyst

This acquisition marks a strategic pivot into the high-growth cloud ERP market, with Workday emerging as a critical player in enterprise digital transformation. TopBloc's selection as a preferred Workday Services Partner is particularly significant, as it validates their technical expertise and implementation methodology.

The timing is opportune, coinciding with Workday's recognition as a leader in Gartner's Magic Quadrant for cloud ERP. Three technological advantages stand out:

• TopBloc's proven deployment capabilities across human capital management, financial and payroll systems
• Scalable implementation methodology validated through 300+ successful installations
• Potential to leverage ASGN's federal sector expertise for government-focused Workday deployments

The integration presents unique opportunities to modernize legacy ERP systems across ASGN's existing client base. With Workday's continued platform evolution and expansion into new verticals, ASGN is well-positioned to capitalize on the growing demand for cloud-based enterprise solutions.

The acquisition also provides ASGN with valuable intellectual property and implementation frameworks that can accelerate service delivery and improve project outcomes. This technical foundation will be important for competing effectively in the enterprise cloud services market.

Upon close of the acquisition, ASGN will become a major player in ERP, with immediate emphasis in the large and growing Workday ecosystem

RICHMOND, Va.--(BUSINESS WIRE)-- ASGN Incorporated (NYSE: ASGN), a leading provider of IT services and professional solutions across the commercial and government sectors, announced today that it has signed a definitive agreement to acquire TopBloc, LLC (“TopBloc” or “the Company”), a leading, high-growth, tech-enabled Workday consultancy, for $340 million in cash and equity. The transaction, which is subject to Hart-Scott Rodino (HSR) and other customary closing conditions, is expected to close in the first quarter of 2025.

Founded in 2016 and headquartered in Chicago, Illinois, TopBloc provides Workday deployment services and on-demand support in areas ranging from human capital management to financial and payroll management. With more than 300 Workday installations over the past five years, TopBloc has become a preferred certified Workday Services Partner for medium and large enterprise customers across North America. TopBloc’s highly experienced team of over 500 consultants will become part of ASGN’s Consulting Services.

“The acquisition of TopBloc aligns perfectly with our strategic vision for continued growth in the IT consulting sector,” said ASGN’s Chief Executive Officer, Ted Hanson. “The increasing demand for ERP solutions among our customers is clear, and, with TopBloc, ASGN not only becomes a leader in delivering these critical capabilities through the Workday platform, but we also gain immediate additional scale in our solution offerings.”

Mr. Hanson continued, “The synergies between our companies are robust; TopBloc’s innovative solutions will seamlessly integrate across our commercial consulting enterprise customer base, while also presenting significant opportunities within the federal government sector. We are enthusiastic about the future and look forward to collaborating closely with TopBloc to build a world-class Workday consulting practice.”

Workday has emerged as a leader in enterprise cloud applications for finance and human resources, with over 70 million users worldwide and more than 60 percent of the Fortune 500 as customers. Recently named a leader in Gartner’s Magic Quadrant for cloud ERP, Workday estimates its total addressable market at approximately $160 billion with significant growth opportunity. Workday reported 15.8 percent subscription revenue growth year-over-year in the third quarter of fiscal 2025 and is anticipating similar, durable annual growth rates through fiscal year 2027.

Speaking of the opportunities for continued growth, TopBloc Chief Executive Officer, Christopher Skinner, noted, “TopBloc is excited to partner with ASGN as we continue to grow our Workday practice. Our acquisition presents great opportunities to leverage ASGN’s extensive client base, enabling us to demonstrate our unique implementation strength while enhancing our ability to serve the expanding Workday market. This is the ideal alignment of two companies that not only share a strong work ethic and enduring dedication to top-notch customer service, but that also possess very similar cultures. Together, we will strategically scale our operations for even greater success."

TopBloc’s diverse client base spans six industry verticals, all complementary to that of ASGN. With a robust pipeline and longstanding client relationships, the Company is expected to generate approximately $150 million in revenues for full year 2025, which represents year-over-year revenue growth in excess of 20 percent. TopBloc also anticipates EBITDA margins in the high teens for 2025. TopBloc’s results will be included in ASGN’s results from the date of the close of the acquisition and will be immediately accretive to ASGN on an adjusted basis. Revenue and margin estimates do not include any revenue synergies related to ASGN’s current pipeline of opportunities.

Additional information on the acquisition will be provided tomorrow, February 5, 2025, on ASGN’s Q4 and FY 2024 earnings conference call at 4:30 p.m. ET. The dial-in number for this conference call is 877-407-0792 (+1-201-689-8263 outside the United States). Please reference Conference ID number 13750060. A webcast link for the call will also be available on ASGN’s investor relations website.

About ASGN Incorporated

ASGN Incorporated (NYSE: ASGN) is a leading provider of IT services and solutions across the commercial and government sectors. ASGN helps corporate enterprises and government organizations develop, implement, and operate critical IT and business solutions through its integrated offerings. For more information, please visit asgn.com.

Safe Harbor

Certain statements made in this news release are “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and involve a high degree of risk and uncertainty. Forward-looking statements include statements, amongst others, regarding our anticipated financial and operating performance and that of TopBloc. All statements in this news release, other than those setting forth strictly historical information, are forward-looking statements. Forward-looking statements are not guarantees of future performance and actual results might differ materially. For a full list of risks and discussion of forward-looking statements, please see our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 23, 2024. We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250204332380/en/

Kimberly Esterkin

Vice President, Investor Relations

kimberly.esterkin@asgn.com

Source: ASGN Incorporated

FAQ

What is the acquisition price for TopBloc by ASGN?

ASGN is acquiring TopBloc for $340 million in cash and equity.

When will ASGN complete the TopBloc acquisition?

The acquisition is expected to close in the first quarter of 2025, subject to Hart-Scott Rodino and other customary closing conditions.

What is TopBloc's projected revenue for 2025?

TopBloc is expected to generate approximately $150 million in revenues for full year 2025, with year-over-year growth exceeding 20 percent.

How many Workday installations has TopBloc completed?

TopBloc has completed more than 300 Workday installations over the past five years.

How many consultants will join ASGN through the TopBloc acquisition?

Over 500 consultants from TopBloc will become part of ASGN's Consulting Services.

What are TopBloc's expected EBITDA margins for 2025?

TopBloc anticipates EBITDA margins in the high teens for 2025.