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ACQUISITION | 9 Months Ended
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Sep. 28, 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 s ubject 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 thirty-nine weeks ended September 28, 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 third 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 receivable | 13,877 |
Prepaid expenses, deposits and other current assets | 216 |
Operating lease right-of-use assets | 97 |
Intangible assets | 14,950 |
Total assets acquired | 34,182 |
Accounts payable and other accrued expenses | 2,245 |
Accrued wages and benefits | 10,369 |
Income tax payable | 3,556 |
Operating lease liabilities | 97 |
Total liabilities assumed | 16,267 |
Net identifiable assets acquired | 17,915 |
Goodwill (1) | 17,308 |
Total cash consideration transferred | $ | 35,223 |
(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 value | Estimated useful life in years | Valuation method | Discount rate
Customer relationships | $ | 14,300 |  | 6 | Multi-period excess earnings | 17.0%
Trade names/trademarks | 650 |  | 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 September 28, 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 September 28, 2025. The amount of revenue and income from operations for HSP included on our Consolidated Statements of Operations and Comprehensive Income (Loss) was $41.9 million and $1.1 million for the thirty-nine weeks ended September 28, 2025, respectively. Income from operations includes $1.7 million of amortization expense related to acquired intangibles. HSP results have been combined with our historical PeopleScout segment, which was renamed PeopleSolutions in fiscal 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.

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