Providence Service Corp. Consolidating HQ, Satellite Office into Atlanta-based Subsidiary LogistiCare
Friday, April 13th, 2018
The Providence Service Corporation announced an organizational consolidation plan to integrate substantially all activities and functions currently performed at the corporate holding company level into LogistiCare, the Company's largest subsidiary and the nation's leader in non-emergency medical transportation. The organizational consolidation will result in a more streamlined company structure with greater operational and strategic alignment and better able to pursue both organic and inorganic growth initiatives. This strategic process is expected to take approximately 12 months to complete, over which time implementation costs will negatively impact earnings. Once completed, the organizational consolidation is expected to generate annual savings of at least $10 million.
LogistiCare will retain its name and continue to be headquartered in Atlanta, GA. The publicly-traded, legal entity, which owns LogistiCare, will continue to be named The Providence Service Corporation and be listed on NASDAQ under the ticker symbol PRSC. As part of the organizational consolidation process, the Company's current Stamford, CT headquarters and Tucson, AZ satellite office will be closed. Current Providence employees will relocate to Atlanta and become LogistiCare employees or fully transition their roles and responsibilities to current or newly hired LogistiCare employees in Atlanta.
The organizational consolidation process will be led by Carter Pate, Interim Chief Executive Officer. Effective today David Shackelton will assume the newly created role of Chief Transformation Officer, Bill Severance will move from his current position as Chief Accounting Officer to Interim Chief Financial Officer, and Laurence Orton will move from his current position as Corporate Controller and VP Finance to Interim Chief Accounting Officer and SVP Finance. A search process for a permanent Chief Financial Officer, based in Atlanta, has been launched.
"Today's announcement marks the realization of a detailed review by the Providence Board of Directors on how best to capitalize on the full growth and value creation potential of LogistiCare," said Chris Shackelton, Chairman of the Providence Board of Directors. "The Board review included a close examination of the Company's capital allocation and acquisition strategy, as well as the deployment of resources across the current holding company, LogistiCare, and other subsidiaries. The Board determined that a consolidation of the holding company infrastructure into LogistiCare creates an organizational structure with strategic, operational and cultural alignment, led by a single executive leadership team. We believe these actions will drive shareholder value by sharpening our focus on the significant growth opportunities available to our core asset, LogistiCare."
Mr. Pate stated, "As we have recently discussed, Providence has been increasingly allocating growth capital and strategic resources to LogistiCare. This organizational consolidation reflects our view that the highest returning opportunities will continue to reside within LogistiCare, where we have been actively investing in numerous organic growth and margin enhancement initiatives. We also anticipate that future M&A efforts will be focused on opportunities that are adjacent, complementary and synergistic to LogistiCare. Ultimately, the consolidation of Providence under a unified, streamlined organizational structure is a natural evolution that will ensure more effective management and alignment with our multiple value enhancement strategies."
Following completion of the organizational consolidation, oversight responsibilities for the Company's Workforce Development Services segment, which mainly operates under the Ingeus brand, as well as the Company's investment in Matrix Medical Network, will transition to the LogistiCare executive team.