Kelly to Acquire Motion Recruitment Partners for $485 Million
Kelly, a company listed on the NASDAQ stock exchange, has reached an agreement to purchase Motion Recruitment Partners (MRP) from Littlejohn & Co for $425 million in cash, along with the potential for an additional $60 million based on performance criteria. The acquisition, set to be finalized in the second quarter of 2024, will be financed through a combination of debt, available capital, and the reinvestment of over $100 million from the sale of Kelly's European staffing operations in January 2024. This strategic move is expected to solidify Kelly's foothold in the competitive recruitment industry by expanding its service offerings and bolstering its market presence.
Key Takeaways
- Kelly is set to acquire Motion Recruitment Partners for a total sum of up to $485 million.
- The acquisition will be funded through a blend of debt, available capital, and proceeds from previous business divestiture.
- The anticipated closing of the deal in Q2 2024 follows the recent sale of Kelly's European staffing operations.
- Littlejohn & Co. is the entity divesting Motion Recruitment Partners.
- There is an opportunity for Kelly to pay an additional $60 million based on the performance of Motion Recruitment Partners.
Analysis
This acquisition is poised to elevate Kelly's competitive standing within the recruitment industry, empowering the company to broaden its service spectrum and gain a larger market share. From a financial standpoint, the agreement is being underpinned by a mix of debt, available capital, and the swift reinvestment of over $100 million from the divestiture of Kelly's European staffing operations in the first quarter of 2024. Littlejohn & Co. stands to gain from a successful exit, while Motion Recruitment Partners foresees enhanced growth prospects within a larger organizational framework. Moreover, this move could potentially lead to job creation and heightened competition among other players in the recruitment sector. It is also likely to trigger further consolidation within the industry. Nonetheless, challenges may surface concerning integration complexities and market fluctuations, which could influence the $60 million earnout contingent on performance.
Did You Know?
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NASDAQ-listed Company: A "NASDAQ-listed company" denotes a business whose shares are publicly traded on the NASDAQ stock exchange. NASDAQ, standing for the National Association of Securities Dealers Automated Quotations, is renowned for its focus on technology stocks and requires its listed companies to adhere to specific financial and corporate governance standards while regularly disclosing financial information to the public.
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Earnout: An "earnout" is a contractual provision in an acquisition agreement that enables the seller to receive additional compensation based on the future performance of the acquired company. In this instance, if Motion Recruitment Partners satisfies predetermined performance criteria subsequent to the acquisition, Kelly might disburse up to an extra $60 million to Littlejohn & Co. This mechanism serves to bridge valuation disparities between buyers and sellers, aligning their interests in achieving predefined post-acquisition objectives.
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Littlejohn & Co.: Littlejohn & Co. is a private investment firm managing assets of approximately $12 billion, with a primary focus on leveraged buyouts, growth capital investments, and restructurings in middle-market companies across diverse sectors. In this transaction, Littlejohn & Co. acts as the seller of Motion Recruitment Partners, having previously acquired the company in 2018.