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Atlas Acquisition Holding And Koosharem To Merge In $840 Mln. Deal - Update

Atlas Acquisition Holdings Corp. (AXG) and Koosharem Corporation or "Select Staffing" Friday agreed to combine and form a new company, to be named Select Staffing, Inc., in a $840 million deal.

Atlas, a special purpose acquisition corporation, noted that Select Staffing, a provider of temporary staffing services in the United States, has grown at a compounded annual rate of 37% over the last four years both organically and through acquisition. Its revenues rose to over $1.4 billion in 2008 from $411 million in 2004.

Select Staffing provides services in 45 states through 355 offices, of which 202 are company-owned and 153 are franchise agent offices.

Following the completion of the merger, Select Staffing's current management team will remain in place with Stephen Sorensen serving as chairman and chief executive officer. Paul Sorensen will be the president and Jeff Mitchell chief financial officer of the combined company.

Commenting of the deal, Gaurav Burman, president of Atlas Acquisition Holdings said, "Select Staffing represents exactly the type of business the SPAC structure was created for. We believe that Atlas' cash coupled with Select Staffing's business gives Atlas shareholders an ideal platform for future value creation."

Under the terms of the merger agreement, Select Staffing shareholders will receive approximately 24.7 million shares of Atlas or 42.5% of the combined company, with certain of Select Staffing Second Lien holders receiving securities convertible into up to 13.4% of the combined company.

In addition to shares offered in the transaction, Select Staffing shareholders will be entitled to receive a potential earn-out payment of up to 6.0 million shares based on both 2010 EBITDA and 2010 stock performance.

As part of the transaction, Select Staffing is expected to retire approximately $200 million or more in total debt.

Post closing, the combined company is expected to have a total of approximately 58.2 million shares outstanding and will continue to trade on the NYSE Amex until the approval of the planned application to transfer listing to the NYSE.

The Hobe Sound, Florida-based Atlas noted that the proposed transaction is subject to shareholder and warrant holder approvals.

AXG is trading at $9.94, down $0.01 or 0.10% on AMEX.

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