Kelly strengthens its specialty talent solutions with the strategic acquisition of Motion Recruitment Partners, enhancing its North American technology, telecommunications, and government sector capabilities, and global Recruitment Process Outsourcing (RPO) solutions.
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In a significant move to bolster its market position and service offerings, Kelly (Nasdaq: KELYA, KELYB), a leading global specialty talent solutions provider, has announced a definitive agreement to acquire Motion Recruitment Partners, LLC (MRP). The acquisition, finalized on May 3, 2024, sees Kelly acquire MRP from private investment firm Littlejohn & Co., LLC, based in Greenwich, Connecticut. This strategic acquisition of motion recruitment partners is set to transform Kelly’s capabilities and expand its reach in key high-growth sectors.
The financial details of the agreement reveal a substantial investment by Kelly, with an upfront cash payment of $425 million upon closing. Furthermore, the agreement includes a potential earnout of up to $60 million contingent on achieving specific performance targets. Kelly intends to fund this acquisition through a combination of debt and existing capital, strategically redeploying over $100 million from the recent sale of its European staffing operations in January 2024. The deal is anticipated to be completed in the second quarter of 2024, pending customary regulatory approvals and closing conditions.
This acquisition marks a pivotal moment for Kelly, significantly enhancing its already robust portfolio of market-leading solutions. Kelly’s existing strengths include Kelly Science, Engineering & Technology (SET), a prominent player in life sciences and engineering staffing, and a leader in technology, telecommunications, and government workforce solutions. KellyOCG, their RPO and managed service provider (MSP) solutions arm, alongside Kelly Professional & Industrial, a top industrial staffing provider, and Kelly Education, the largest provider of K-12 education talent, will all be complemented and strengthened by the integration of motion recruitment partners.
Post-acquisition, motion recruitment partners will operate under its current brand structure, aiming to amplify Kelly’s capabilities and capture a larger share of the market across several crucial domains:
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Technology Staffing and Consulting: Motion Recruitment’s expertise in technology staffing and consulting will be instrumental in expanding Kelly SET’s delivery platform. This integration is poised to establish Kelly SET as a top-tier provider of tech talent solutions within the U.S., significantly strengthening its presence in the competitive technology recruitment landscape.
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RPO and MSP Solutions: The inclusion of Sevenstep®, a leading brand under motion recruitment partners, brings an industry-recognized name and a high-value client base in both RPO and MSP. This addition is expected to elevate KellyOCG’s RPO segment into the top five globally, consistently ranking among the leaders in recruitment process outsourcing.
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Telecommunications Offering: Motion Telco will contribute a complementary client portfolio and specialized delivery capabilities, enriching Kelly’s existing telecommunications specialty. This synergy will create a market-leading telecommunications offering, providing comprehensive solutions for clients in this rapidly evolving sector.
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Government Technology Subcontracting: TG Federal introduces a dedicated platform in government technology subcontracting, complete with established partnerships. This new platform will build upon Kelly SET’s existing success in the government space, opening up new avenues for growth and specialization within the public sector.
The acquisition of motion recruitment partners aligns seamlessly with Kelly’s long-term strategic vision, promising to boost the company’s revenue growth potential and accelerate EBITDA margin expansion. This move builds on the substantial EBITDA margin improvements Kelly has already achieved through strategic initiatives in 2023 and the divestiture of its European staffing operations earlier in 2024.
“We are thrilled to welcome MRP to the Kelly family, a transformative leap in our journey to sharpen our focus on higher-margin, higher-growth specialty outcome-based and staffing services in North America, and global RPO and MSP solutions,” stated Peter Quigley, president and chief executive officer of Kelly. “The businesses within motion recruitment partners are exceptionally well-suited to Kelly’s SET and OCG segments, bringing deep expertise and a strong foothold in attractive end-markets. Kelly’s extensive resources and collaborative culture will provide a robust platform for MRP to achieve unprecedented growth.”
Beth Gilfeather, chief executive officer of MRP, also expressed enthusiasm about the partnership: “This new partnership presents numerous valuable and complementary opportunities. Both organizations stand to gain significant insights and advantages from each other. We are excited to embark on this new chapter, becoming part of the distinguished Kelly legacy, and are highly motivated to be a key driver in achieving the ambitious growth objectives ahead.”
Drew Greenwood, managing director at Littlejohn, reflected on MRP’s journey: “We are proud to have collaborated with MRP’s exceptional leadership team during a period of significant growth and evolution. Under our ownership, MRP successfully implemented various organic and inorganic strategies, establishing itself as a premier talent solutions provider, particularly in the technology sector. We are confident in the company’s continued success as it integrates with Kelly.”
The acquisition of motion recruitment partners represents Kelly’s largest acquisition to date, following eight successful acquisitions since 2017. This inorganic growth strategy is fueled by Kelly’s proactive measures to unlock capital and refine its operating model, including the sale of European staffing operations, monetization of non-core real estate, and strategic adjustments in its partnerships and holdings in PersolKelly and operations in Brazil and Russia.
Kelly is set to provide further details regarding this acquisition during its upcoming first-quarter earnings conference call on May 9, 2024. Houlihan Lokey served as financial advisor to Kelly, with Jasso Lopez PLLC as legal counsel. Robert W. Baird acted as the financial advisor to MRP, with Baker Hostetler serving as legal counsel.
About Kelly®
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) has been instrumental in shaping the staffing industry since 1946. As a global leader, Kelly specializes in connecting companies with skilled talent and assisting job seekers in finding meaningful employment. With a comprehensive network spanning industries and global markets, Kelly facilitates over 500,000 work connections annually. Their extensive suite of outsourcing and consulting services ensures businesses have access to the right people, precisely when and where they are needed. Headquartered in Troy, Michigan, Kelly empowers both businesses and individuals across diverse sectors including science, engineering, technology, education, manufacturing, retail, finance, and energy. In 2023, Kelly reported a revenue of $4.8 billion. For more information, please visit kellyservices.com.
About Motion Recruitment Partners, LLC
Established in 1989 and based in Boston, Massachusetts, motion recruitment partners, LLC, is the parent company to a portfolio of leading global talent solution providers. These 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). To learn more, visit www.motionrecruitment.com, www.sevensteptalent.com, and www.tgfederal.com.
About Littlejohn & Co., LLC
Littlejohn & Co., LLC, is an investment firm based in Greenwich, Connecticut, focusing on private equity and debt investments, primarily in growing middle-market industrial and services companies. With over 25 years of operational and sector expertise and approximately $8 billion in regulatory assets under management, Littlejohn is dedicated to fostering sustainable success within its portfolio companies through disciplined strategic change. For more details about Littlejohn, visit www.littlejohnllc.com.
Forward-Looking Statements
This release includes forward-looking statements that are subject to risks and uncertainties, as defined under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements concern Kelly’s financial expectations and are not based on historical facts. Factors that could cause actual results to differ materially are detailed in the Company’s filings with the Securities and Exchange Commission and include market conditions, labor market disruptions, regulatory impacts, claim trends, legal liabilities, business growth strategies, brand reputation, cybersecurity risks, and international business factors, among others. Forward-looking statements are identifiable by terms like “may,” “will,” “expect,” “anticipate,” and “believe.” This information is current as of this press release date, and Kelly assumes no obligation to update these statements in light of new information or future events.
(1) Staffing Industry Analysts Largest Life Sciences Staffing Firms in the U.S.: 2023 Update
(2) Staffing Industry Analysts Largest Engineering Staffing Firms in the U.S.: 2023 Update
(3) Everest Group Recruitment Process Outsourcing PEAK Matrix® 2023
(4) Everest Group Contingent Workforce Management / Managed Service Provider PEAK Matrix® 2023
(5) Staffing Industry Analysts Largest Industrial Staffing Firms in the U.S.: 2023 Update
(6) Staffing Industry Analysts Largest Education Staffing Firms in the U.S.: 2023 Update
