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ACQUISITION
 6 Months Ended
Jun. 29, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITION ACQUISITION
Effective January 31, 2025, we acquired all of the outstanding equity interests of HSP. HSP is a long-term staffing and permanent hiring solutions provider, primarily focused on healthcare positions in the U.S. This acquisition allows us to expand revenue in the healthcare end-market while also diversifying our business.
Under the terms of the share purchase agreement, the base purchase price of $42.0 million was adjusted for estimated unpaid pre-close liabilities of the selling shareholders, cash acquired, and estimated excess working capital. The purchase price allocated to acquired assets and liabilities was cash consideration of $35.2 million. The purchase price is subject to further adjustment based on HSP’s final pre-close liabilities and working capital amounts. As part of the share purchase agreement, certain HSP employees can earn up to an additional $14.0 million based on the financial performance of the business over the next two years, which we have concluded should be treated as compensation expense. Any amounts probable of being paid out under the agreement are expensed over the required service period. We incurred acquisition-related costs of $0.8 million for the twenty-six weeks ended June 29, 2025, which are included in SG&A expense on the Consolidated Statements of Operations and Comprehensive Income (Loss).
The following table reflects our preliminary allocation of the purchase price to our best estimate of the fair value of assets acquired and liabilities assumed using information available as of the acquisition date. Immaterial measurement period adjustments made to the fair value of assets acquired and liabilities assumed during the fiscal second quarter of 2025 have been reflected in the table below. Our preliminary purchase price allocation may be adjusted further as more information becomes available about facts and circumstances that existed as of the acquisition date, primarily related to the settlement of assets and liabilities acquired.
(in thousands)Purchase price allocation
Purchase price allocated as follows:
Cash and cash equivalents$5,042 
Accounts receivable13,735 
Prepaid expenses, deposits and other current assets216 
Operating lease right-of-use assets
97 
Intangible assets
14,950 
Total assets acquired34,040 
Accounts payable and other accrued expenses2,233 
Accrued wages and benefits10,369 
Income tax payable3,650 
Operating lease liabilities
97 
Total liabilities assumed16,349 
Net identifiable assets acquired17,691 
Goodwill (1)17,491 
Total cash consideration transferred
$35,182 
(1) Goodwill represents the expected synergies with our existing businesses, the acquired assembled workforce, potential new clients and future cash flows after the acquisition of HSP, and is deductible for income tax purposes.
Intangible assets include identifiable intangible assets for customer relationships and trade names/trademarks. We estimated the preliminary fair value of the acquired identifiable intangible assets, which are subject to straight line amortization, using an income approach. These fair value measurements were based on Level 3 inputs under the fair value hierarchy.
The following table sets forth the components of identifiable intangible assets acquired, including immaterial measurement period adjustments, as of January 31, 2025:
(in thousands, except percentages and estimated useful lives, in years)
Estimated fair valueEstimated useful life in years
Valuation method
Discount rate
Customer relationships$14,300 6
Multi-period excess earnings
17.0%
Trade names/trademarks650 7
Relief from royalty
17.0%
Total acquired identifiable intangible assets$14,950 
The acquired assets and assumed liabilities of HSP are included on our Consolidated Balance Sheets as of June 29, 2025, and the results of its operations are reported on our Consolidated Statements of Operations and Comprehensive Income (Loss) for the period from February 1, 2025 to June 29, 2025. The amount of revenue and income from operations for HSP included on our Consolidated Statements of Operations and Comprehensive Income (Loss) was $27.7 million and $0.6 million for the twenty-six weeks ended June 29, 2025, respectively. HSP results have been combined with our historical PeopleScout segment, which was renamed PeopleSolutions beginning in 2025. We concluded the acquisition of HSP was not material to our consolidated results of operations and, as such, pro forma financial information was not required.