Kelly Completes Acquisition of Motion Recruitment Partners, LLC
Kelly has completed its acquisition of Motion Recruitment Partners (MRP), a move expected to boost EBITDA margins. MRP will continue operating under its existing brands. The acquisition aims to enhance Kelly's staffing and consulting solutions in technology, telecommunications, and government sectors in North America, as well as its global RPO solutions. The purchase price was $425 million, with an additional $60 million contingent on certain performance criteria by March 2025. A webcast detailing the acquisition will be held on June 18, 2024.
- Kelly's acquisition of MRP is expected to accelerate EBITDA margin expansion.
- The acquisition strengthens Kelly's staffing and consulting solutions across key sectors like technology, telecommunications, and government.
- MRP's capabilities complement Kelly's existing services, potentially driving significant growth.
- The purchase was funded through debt and available capital, including $100 million from the sale of Kelly’s European staffing operations.
- The live webcast on June 18 will provide further insights into MRP's financial profile, including recent revenue, gross margin, and net margin trends.
- The acquisition deal involves a high purchase price of $425 million.
- An additional cash consideration of up to $60 million may be required if certain conditions are met by March 2025.
- The funding for the acquisition includes taking on new debt, which could impact Kelly's financial stability.
Insights
The acquisition of Motion Recruitment Partners by Kelly is a noteworthy move in the context of both companies' financial strategy and the broader staffing industry. At a purchase price of
By funding this transaction through debt and available capital, Kelly is poised to rapidly deploy proceeds from its recent sale of European staffing operations. This strategic redeployment of capital reflects Kelly's focus on achieving higher-margin growth in North America and globally in sectors with robust profit potential. The integration of MRP's specialized capabilities should, theoretically, drive higher revenue growth potential and sustained EBITDA margin expansion.
Retail investors should note that the EBITDA margin expansion signifies an improvement in operational efficiency and profitability. Consistent growth in EBITDA margins typically correlates with enhanced shareholder value over time. Nonetheless, the reliance on debt financing should be monitored closely to ensure it does not adversely impact the company's financial stability in the long term.
From a market perspective, Kelly's acquisition of MRP appears to create synergies that align well with market trends. MRP's stronghold in enterprise technology staffing, telecommunications and government specialties complements Kelly's existing offerings, potentially creating a formidable entity in the North American staffing and consulting market.
Given the increasing demand for specialized technology talent and recruitment process outsourcing (RPO) solutions, this acquisition strategically positions Kelly to capture a larger market share. Investors should consider that the combined entity could tap into new growth opportunities and client segments, further solidifying its market position.
However, the integration process will be crucial. Synergistic benefits often depend on effective management and integration of the acquired entity. If done successfully, it can lead to enhanced competitiveness and stronger market footing. Any hiccups in integration could delay the anticipated growth and margin expansion.
From a technological standpoint, the acquisition of MRP by Kelly is poised to bring substantial innovation and expertise to Kelly's offerings. MRP's extensive capabilities in enterprise technology staffing mean Kelly can now offer more specialized and high-demand tech solutions. This is particularly relevant in our current climate, where technology is driving almost every sector.
For retail investors, this translates into potential growth in sectors such as AI, cybersecurity and cloud computing, where specialized talent is essential. The strategic enhancement in technological staffing and consulting could result in Kelly becoming a go-to provider for firms seeking cutting-edge tech talent, thus driving revenue growth.
However, the tech landscape is highly competitive and constantly evolving. Kelly will need to continuously adapt and innovate to keep pace with industry trends and maintain its competitive edge.
- Transformational acquisition expected to accelerate EBITDA margin expansion
- MRP to continue delivering services through existing operating companies and brands
- Kelly management to host live webcast on June 18 to provide more details about the rationale for the acquisition and insights into MRP’s financial profile
TROY, Mich., June 03, 2024 (GLOBE NEWSWIRE) -- Kelly (Nasdaq: KELYA, KELYB) (“the Company”), a leading global specialty talent solutions provider, today announced it has completed the acquisition of Motion Recruitment Partners, LLC (“MRP”), from Littlejohn & Co., LLC (“Littlejohn”), a private investment firm based in Greenwich, Connecticut. Kelly previously announced on May 3, 2024, that it had entered into a definitive agreement to acquire MRP from Littlejohn.
The acquisition of MRP strengthens the scale and capabilities of Kelly’s staffing and consulting solutions across technology, telecommunications, and government specialties in North America, and recruitment process outsourcing (RPO) solutions globally. With a margin profile commensurate with a highly specialized technology talent solutions provider, MRP fits exceptionally well with Kelly's strategy to enhance the revenue growth potential of the company and drive continued EBITDA margin expansion.
“Today marks a transformational step forward on our journey to sharpen Kelly’s focus on higher-margin, higher-growth specialty outcome-based and staffing services in North America, and global RPO and MSP solutions,” said Peter Quigley, president and chief executive officer, Kelly. “I’m excited to welcome MRP to the Kelly team and look forward to the significant growth and value creation we will deliver together.”
“MRP’s capabilities are excellent complements to Kelly SET as we continue our journey to become a leading technology staffing and consulting solutions provider in North America,” said Hugo Malan, president, Kelly SET. “They bring extensive expertise in enterprise technology staffing, as well as robust telecommunications and government specialties that align exceptionally well with our strong offerings in these segments.”
“Sevenstep’s RPO and MSP offerings align exceptionally well with KellyOCG and we believe the combined entities create a powerful story to bring to the market,” said Tammy Browning, president, KellyOCG. “We look forward to authoring this story together with the Sevenstep team and unlocking new opportunities for growth over the long term.”
Kelly acquired MRP for a purchase price of
Kelly will host a live webcast of a conference call with financial analysts on June 18, 2024, at 9 a.m. ET to provide more details about the acquisition of MRP. Quigley and Olivier Thirot, executive vice president and chief financial officer, will present the rationale for the acquisition and insights into MRP’s financial profile, including recent revenue, gross margin, and net margin trends. Following the presentation, Quigley and Thirot will address questions from financial analysts. The live webcast will be accessible on the Investor Relations section of Kelly’s public website. A recording of the webcast will be available after 1:30 p.m. ET on June 18, 2024.
About Kelly®
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, we have become experts in the many industries and local and global markets we serve. With a network of suppliers and partners around the world, we connect more than 500,000 people with work every year. Our suite of outsourcing and consulting services ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, we empower businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2023 was
About Motion Recruitment Partners, LLC
Established in 1989 and headquartered in Boston, Massachusetts, Motion Recruitment Partners, LLC, is parent company to a group of leading global talent solution providers to include Motion Recruitment (IT Staffing & Managed Solutions), Motion Consulting Group (IT Consulting), Motion Telco (IT & Telecom Solutions), Tech in Motion (Tech Networking & Events program), TG Federal (Government IT Subcontracting), and Sevenstep® (RPO, MSP & TA Advisory/Consulting). Learn more at www.motionrecruitment.com, www.sevensteptalent.com, and www.tgfederal.com.
About Littlejohn & Co., LLC
Littlejohn & Co., LLC, is a Greenwich, Connecticut-based investment firm focused on private equity and debt investments primarily in growing middle-market industrial and services companies that can benefit from Littlejohn’s 25+ years of operational and sector expertise. With approximately
Forward-Looking Statements
This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Kelly’s financial expectations, are forward-looking statements. Factors that could cause actual results to differ materially from those contained in this release include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business’s anticipated growth strategies, (vi) our future business development, results of operations and financial condition, (vii) damage to our brands, (viii) dependency on third parties for the execution of critical functions, (ix) conducting business in foreign countries, including foreign currency fluctuations, (x) availability of temporary workers with appropriate skills required by customers, (xi) cyberattacks or other breaches of network or information technology security, and (xii) other risks, uncertainties and factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. All information provided in this press release is as of the date of this press release and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
KLYA-FIN
| ANALYST CONTACT: | MEDIA CONTACT: | ||
| Scott Thomas | Christian Taske | ||
| (248) 251-7264 | (248) 561-8823 | ||
| scott.thomas@kellyservices.com | christian.taske@kellyservices.com |
FAQ
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