HireQuest, Inc. Announces Acquisition of Northbound Executive Search

Rhea-AI Summary

HireQuest, a national franchisor specializing in staffing services, announced its acquisition of Northbound Executive Search, a New York-based firm focused on executive placement and short-term consulting, generating over $15 million in revenue for 2021. This strategic move aims to expand HireQuest's offerings in higher-margin sectors. The acquisition will utilize existing cash, a line of credit, and $500,000 in stock, with a portion financed via a seller's note. Expected completion is in Q1 2022, ensuring uninterrupted operations for Northbound.

Positive

• Acquisition of Northbound enhances HireQuest's services in executive placement and consulting.
• Northbound reported over $15 million in revenue for 2021, indicating a solid market position.
• Founders will remain involved, providing continuity in leadership and operational direction.

Negative

• Transaction completion is dependent on several closing conditions, potentially delaying integration.
• The acquisition requires a modest draw on the line of credit, which might impact liquidity.

HireQuest to Acquire Executive Placement and Short-term Consultant Firm in New York

GOOSE CREEK, SC / ACCESSWIRE / January 25, 2022 / HireQuest, Inc. (NASDAQ:HQI), a national franchisor of on-demand, temporary, and commercial staffing services, today announced that it has entered into a definitive agreement to acquire Northbound Executive Search, LTD., (northboundsearch.com) in New York, New York. Founded in 2010, Northbound provides executive placement and short-term consultant services primarily to blue chip clients in the financial services industry. The company generated over $15 million of revenue in 2021.

"The acquisition of Northbound continues to build out HireQuest's offerings in the higher margin executive placement and short-term consultant segments," commented Rick Hermanns, HireQuest's President and Chief Executive Officer. "The company is a natural fit for our growing family of brands and we are excited that Northbound's founders, Rachel and Greg Feder, will be staying on to lead Northbound into its next chapter."

Greg Feder, co-founder and Managing Partner of Northbound, commented, "With this partnership, Northbound will have the ability to draw from an organization that will help to fuel our next stage of growth."

Rachel Feder, co-founder and Managing Partner of Northbound, added, "As Managing Partners of Northbound, we will continue to operate the business on a day-to-day basis and our teams will continue to focus on providing a premium level of service to our clients."

At the close of the transaction, Northbound will be converted to HireQuest's franchise model. HireQuest will fund consideration at close for this acquisition with existing cash on hand, a modest draw on its line of credit, and $500,000 in HireQuest stock. A portion of the purchase price will be paid as a seller's note over three years. Completion of this transaction is subject to a number of closing conditions. Subject to such conditions, the transaction is expected to close in the first quarter of 2022. During the interim, Northbound will remain open for business without interruption.

Richmond, VA based Transact Capital Securities, LLC served as financial advisor to Northbound.

About HireQuest

HireQuest, Inc. is a nationwide franchisor that provides on-demand labor and commercial staffing solutions in the light industrial, blue-collar, and commercial segments of the staffing industry for HireQuest Direct, HireQuest, Snelling, and Link franchised offices across the United States. Through its national network of over 210 franchisee-owned offices in more than 35 states and the District of Columbia, HireQuest provides employment for more than 60,000 individuals annually that work for thousands of customers in numerous industries including construction, light industrial, manufacturing, hospitality, clerical, medical, dental, travel, and event services. For more information, visit www.hirequest.com.

Important Cautions Regarding Forward-Looking Statements

This news release includes, and the company's officers and other representatives may sometimes make or provide certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, among others, statements with respect to future economic conditions; future revenue or sales and the growth thereof; operating results; anticipated benefits of the acquisition of Northbound, the transition of Northbound's operations to franchised offices, effects of expanded scale, or the status of integration of Northbound's operations. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods. While the company believes these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. The company cannot assure you that these expectations will occur, and its actual results may be significantly different because of various risks and uncertainties discussed in the "Risk Factors" section and elsewhere in the company's most recent Annual Report on Form 10-K and subsequent filings with the SEC. Any forward-looking statement made by the company or its management in this news release is based only on information currently available to the company and speaks only as of the date on which it is made. The company and its management disclaim any obligation to update or revise any forward-looking statement, whether written or oral, that may be made from time to time, based on the occurrence of future events, the receipt of new information, or otherwise, except as required by law.

Company Contact:
HireQuest, Inc.
David Hartley, Director of Corporate Development
(800) 835-6755
Email: cdhartley@hirequest.com

Investor Relations Contact:
IMS Investor Relations
John Nesbett/Jennifer Belodeau
(203) 972-9200
Email: hirequest@imsinvestorrelations.com

SOURCE: HireQuest Inc.

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FAQ

What is the purpose of HireQuest's acquisition of Northbound Executive Search?

The acquisition aims to expand HireQuest's services in the higher-margin executive placement and consulting sectors.

When is the expected closing date for the HireQuest and Northbound transaction?

The transaction is expected to close in the first quarter of 2022, pending closing conditions.

How will HireQuest fund the acquisition of Northbound?

HireQuest will use existing cash, a modest draw on its line of credit, and $500,000 in stock.

What was Northbound's revenue in 2021?

Northbound generated over $15 million in revenue in 2021.

Who will lead Northbound after the acquisition by HireQuest?

The founders of Northbound, Rachel and Greg Feder, will continue to lead the company post-acquisition.