AMN Healthcare services announced friday that is would acquire Platinum Select- a travel nurse related staffing firm.

What it Means

The trend continues.  Platinum deal is in the $50m range- which includes a portion paid as an earnout for future performance.

Again, this is a solid middle market deal.  We see AMN buying up market share and expanding in to the Dallas market.

In terms of valuation- Platinum had revenues in 2007 of $52.9 million (earnings data was not released).  At 1x revenues, this is actually a pretty pricey deal considering its size. 

What about the Earn Out?

Not surprised to see it at all.  At 800 clients and over $50m in revenue, Platinum is certainly big enough where "the owner isn't the company."  But beyond that, acquirers are keeping an eye to the future and unsure of what pressures that the economy will put in earnings.  In businesses that are not counter-cyclicial - and staffing is not- expect to see more earn outs in deals regardless of size.