Acquisitions. On May 15, 2012, pursuant to an Agreement of Merger, dated as of March 20, 2012 (the Merger Agreement), by and among the Company, OA Acquisition Corp., a Virginia corporation and a wholly-owned subsidiary of the Company (Merger Sub), Apex Systems, Inc. (Apex Systems) and Jeffrey E. Veatch, as the Shareholder Representative, Merger Sub was merged with and into Apex Systems, with Apex Systems surviving the merger and continuing as a wholly owned subsidiary of the Company (the Merger). Pursuant to the Merger Agreement, the Company acquired all of the outstanding shares of Apex Systems, a privately-owned provider of information technology staffing and services headquartered in Richmond, Virginia. The primary reason for the acquisition was to expand the Company's information technology staffing services. As more fully described in our Proxy Statement, filed with the SEC on April 13, 2012, and in the Merger Agreement, the Company acquired all of Apex Systems' equity and retired all of its debt for a total of approximately $610.5 million, comprised of $385.0 million paid in cash at closing and 14.3 million shares of common stock of the Company issued to the holders of shares of common stock and options to purchase common stock of Apex Systems immediately prior to the effective time of the Merger. Acquisition costs related to this transaction totaled approximately $8.6 million and were expensed in 2012. Goodwill is expected to be deductible for tax purposes. The results of operations of Apex Systems have been combined with those of the Company since the acquisition date. Apex Systems revenues and net loss included in the Statement of Operations for the six months ended June 30, 2012 were $99.0 million and $(7.0) million, respectively.

On February 28, 2011, the Company acquired all of the outstanding shares of Valesta, a privately-owned provider of specialized clinical research staffing headquartered in Belgium. The primary reasons for the acquisition were to expand the Life Sciences business operations and to leverage the Company’s infrastructure. The purchase price for Valesta totaled $23.7 million comprised of $16.8 million in cash paid at closing, plus potential future earn-out consideration of $6.9 million (the maximum earn-out is capped at a Euro value of 5.0 million or approximately $6.3 million at June 30, 2012 exchange rates) based on estimated financial performance of Valesta through 2013. Acquisition costs related to this transaction totaled approximately $0.4 million and were expensed in 2011. Goodwill is not deductible for tax purposes. The results of operations for the acquisition have been combined with those of the Company since the acquisition date.

On July 31, 2011, the Company acquired all of the outstanding shares of HealthCare Partners (HCP), a privately-owned provider of physician staffing headquartered in Atlanta, Georgia. The primary reasons for the acquisition were to expand the Physician segment business operations geographic coverage and to leverage the Company’s infrastructure. The estimated purchase price for HCP was approximately $19.1 million comprised of $15.7 million in cash paid at closing, plus potential future earn-out consideration of $3.4 million (the maximum earn-out is capped at $3.7 million) based on estimated financial performance of HCP through 2013. Acquisition costs related to this transaction totaled approximately $57,000 and were expensed in 2011. Goodwill is deductible for tax purposes. The results of operations for the acquisition have been combined with those of the Company since the acquisition date.

Assets and liabilities of the acquired companies were recorded at their estimated fair values at the dates of acquisition. The excess purchase price over the fair value of net tangible assets and identifiable intangible assets acquired has been allocated to goodwill. The fair value assigned to identifiable intangible assets was determined primarily by using a discounted cash flow method. The Company's allocation of the purchase price for Apex Systems is preliminary, as the valuation of identifiable intangible assets and goodwill is still being finalized, as are the amounts related to working capital, income taxes and long-term liabilities are still being finalized. The Company's allocation of the purchase price for HCP is preliminary, as the amounts related to working capital and income taxes are still being finalized. The Company intends to discontinue the use of the HCP tradename during 2012. Any measurement period adjustments will be recorded retrospectively to the acquisition date. During the quarter ended March 31, 2012, the Company adjusted Valesta's purchase price allocation. The adjustment was to recognize the tax impact of the amortization of identifiable intangible assets. The adjustment was not material and had no impact on the consolidated statement of operations; accordingly it is not presented retrospectively.

The fair value of earn-out obligations is based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the respective purchase agreements. See Note 6 for further information regarding the fair value of earn-outs and the level 3 rollforward disclosure.

The following tables summarize (in thousands) the purchase price allocations for the acquisitions of Apex Systems and HCP, which are subject to finalization during the measurement period and Valesta:



	2012 Acquisition		2011 Acquisitions
	Apex Systems		HCP		Valesta		Total
Current assets	$	169,803	$	3,941	$	6,332	$	10,273
Property and equipment	902		123		299		422
Goodwill	244,810		14,407		17,088		31,495
Identifiable intangible assets	273,901		1,784		5,679		7,463
Other	494		13		26		39
Total assets acquired	$	689,910	$	20,268	$	29,424	$	49,692

Current liabilities	$	78,528	$	1,070	$	4,774	$	5,844
Other	850		49		991		1,040
Total liabilities assumed	79,378		1,119		5,765		6,884
Total purchase price	$	610,532	$	19,149	$	23,659	$	42,808

The following table summarizes (in thousands) the intangible asset allocation, in connection with the purchase price allocation for the acquisitions of Apex Systems and HCP, which are subject to finalization during the measurement period and Valesta:



		Intangible Asset Value
		2012 Acquisition		2011 Acquisitions
	Useful life	Apex Systems		HCP		Valesta		Total
Contractor relations	2 – 5 years	$	10,589	$	814	$	266	$	1,080
Customer relations	2 – 11 years	114,493		950		2,395		3,345
Non-compete agreements	2 – 7 years	2,076		20		440		460
Trademarks	indefinite	146,743		—		2,578		2,578
Total intangible assets acquired		$	273,901	$	1,784	$	5,679	$	7,463

The summary below (in thousands, except for per share data) presents pro forma consolidated results of operations for the six months ended June 30, 2012 and 2011 as if the acquisitions of HCP and Valesta occurred on January 1, 2010, and the acquisition of Apex Systems occurred on January 1, 2011. The pro forma financial information gives effect to certain adjustments, including: the amortization of intangible assets and interest expense on acquisition-related debt and changes in the management fees as a result of the acquisition. Acquisition-related costs are assumed to have occurred at the beginning of the year prior to acquisition. The pro-forma financial information is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future operating results.



	Six Months Ended June 30,
	2012		2011
Revenues	$	734,007	$	620,762
Operating income	$	53,645	$	29,455
Net income	$	24,171	$	9,786

Basic earnings per share	$	0.47	$	0.19
Diluted earnings per share	$	0.46	$	0.19

Weighted average number of shares outstanding	51,788		51,102
Weighted average number of shares and dilutive shares outstanding	52,795		51,927