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Acquisitions and Disposition | 3 Months Ended
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Mar. 30, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions and Disposition | 4. Acquisitions and Disposition Acquisitions Children's Therapy Center On November 13, 2024, Kelly Services USA, LLC (“KSU”), a wholly owned subsidiary of the Company, acquired 100% of the issued and outstanding limited liability company interests of Children's Therapy Center (“CTC”). CTC specializes in occupational, physical, and speech therapy for children and expands the Company's growth opportunities in therapeutic services. Under terms of the purchase agreement, the purchase price of $3.3 million was adjusted for cash held by CTC at the closing date and estimated working capital adjustments, resulting in the company paying cash of $3.1 million. In the first quarter of 2025, the Company received a post-close net working capital adjustment of $0.1 million. Goodwill generated from the acquisition of $2.9 million, net of the net working capital adjustment, was primarily attributable to expanding market potential and was assigned to the Education operating segment (see Goodwill footnote). CTC's results of operations are included in the Education segment. Motion Recruitment Partners On May 31, 2024, the Company indirectly acquired 100% of the equity interests in Motion Recruitment Partners, LLC (“MRP”) by way of a merger with MRP Merger Sub, Inc. (“Merger Sub”), a newly-formed, wholly owned subsidiary of the Company, with and into MRP Topco (“Topco”), the indirect parent company of MRP and Littlejohn Fund V, L.P. (“Littlejohn”, with Topco surviving the merger (the “Merger”). MRP is a parent company to a group of leading global talent solutions providers and the acquisition is expected to strengthen the scale and capabilities of Kelly's solutions portfolio. Under terms of the merger agreement, the $425.0 million purchase price was adjusted for estimated cash held by MRP at the closing date and estimated working capital adjustments, resulting in the Company paying cash of $440.0 million. The acquisition was funded with cash on hand and available credit facilities (see Debt footnote). Total consideration included $3.4 million of contingent consideration related to an earnout payment with a maximum potential cash payment of $60.0 million in the event certain financial metrics are met per the terms of the agreement. The earnout payment was based on a multiple of gross profit in excess of an agreed-upon amount during the earnout period, defined as the 12 months ending March 31, 2025, with any necessary payment due to the seller in second quarter of 2025. The initial fair value of the earnout was established using a Monte Carlo simulation model, reassessed quarterly, and was written down to zero in the fourth quarter of 2024. As of first quarter-end 2025, the value remained at zero, and no liability is recorded (see Fair Value Measurements footnote). The merger agreement contains representations and warranties and covenants customary for a transaction of this nature. The total consideration was as follows (in millions of dollars):
Cash consideration paid | $ | 425.0 |
Estimated cash acquired | 13.6 |
Estimated net working capital adjustment | 1.4 |
Total cash consideration | 440.0 |
Additional consideration payable | 3.4 |
Net working capital adjustment | 1.4 |
Total consideration | $ | 444.8 |
The purchase price allocation for this acquisition is preliminary and could change. None of the goodwill generated from the acquisition is expected to be deductible for tax purposes. MRP's results of operations are included in the ETM and SET segments. Disposition of EMEA Staffing Operations On January 2, 2024, the Company completed the sale of its EMEA staffing operations (“disposal group”), which was included in the Company's former International operating segment, to Gi Group Holdings S.P.A. (“Gi”). Upon closing, the Company received cash proceeds of $110.6 million, or $77.1 million net of cash disposed, which was included in investing activities in the consolidated statements of cash flows. The total gain on the transaction as of first quarter-end 2024 was $11.6 million, which was recorded in the gain on sale of EMEA staffing operations in the consolidated statements of earnings. The Company expects to receive additional net cash proceeds to reflect the cash-free, debt-free transaction basis, as well as working capital and other adjustments. The Company will not receive any proceeds from the contingent consideration opportunity associated with the transaction. In the first quarter of 2024, the Company recorded a euro-denominated receivable from Gi of $26.9 million representing the adjustments that were determinable and expected to be received. In the second quarter of 2024, the Company recorded negative working capital and other adjustments of $10.1 million, which reduced the net receivable from Gi. As of first quarter-end 2025, the net receivable was $17.0 million, compared to $16.4 million as of year-end 2024, with the change of $0.6 million related to foreign currency remeasurements during the first quarter of 2025. The Company is actively reconciling the receivable in accordance with the purchase agreement and expects it to be settled upon completion of this process. The receivable is included in prepaid expenses and other current assets in the consolidated balance sheet and included in the gain on the transaction. The disposal group did not meet the requirements to be classified as discontinued operations as the sale did not have a material effect on the Company's operations and did not represent a strategic shift in the Company's strategy.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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