Boston, MA 04/04/2014 (wallstreetpr) – For executives, the challenge is keeping the business in profitable position while maintaining high quality product and service delivery. It is not different at The Providence Service Corporation (NASDAQ:PRSC). The company is involved in providing non-emergency transportation solutions and social services, mainly under government sponsor. The company is looking to grow into new markets, increasing its product and services portfolio, improve service and product quality and to return solid value to shareholders. On this basis, the management is looking at acquisition as a way to augment organic growth. And Ingeus is the latest target.
The company disclosed earlier this week that it had reached a deal to acquire Ingeus, company which provides job training. The business serves 10 countries around the world, and it is owned by Therese Rein, the wife of former Australian PM Kevin Rudd.
But the question remains about how great the decision to acquire Ingeus will turn out to be. Although The Providence Service Corporation (NASDAQ:PRSC) is not soaked in losses, the company’s profitability has been seen faltering in the most recent quarter.
Faltering performance
For the fourth quarter 2013 financial results released March 12, the company reported earning 24 cents per share, way below Wall Street estimate of 35 cents. The company also missed out on revenue expectation. Revenue came in at $276.80 million, at a time when Wall Street expected $280.13 million.
According Warren Rustand, Providence CEO, Ingeus matches what Providence believes in and wants to achieve. Thus, Ingeus will effectively complement the existing business of The Providence Service Corporation (NASDAQ:PRSC), both culturally and strategically.
One particular thing which stands out is that sharing of expertise between the two companies will be possible and important for their collective growth given that there is no client overlap currently. Also, the decision to keep Rein at the management of Ingeus, will ensures that the company maintains under strong management and deep customer relationship.
Investor takeaway
In view of the acquisition of Ingeus, there are several reasons to believe that The Providence Service Corporation (NASDAQ:PRSC) is getting started on a path and strategy to turning tables on its lackluster financial results.
