Company: KELYB
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000055135-25-000007
Chunk: 15

Company: KELLY SERVICES INC
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 15
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 CTC's results of operations are included in the Education segment.  Pro forma results of operations for this acquisition have not been presented as the acquisition does not have a material impact to the consolidated statements of earnings.Motion Recruitment PartnersOn 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 is based upon 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, and any necessary payment is due to the seller in the 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 (see Fair Value Measurements footnote).  In the fourth quarter of 2024, the Company paid a post-close net working capital adjustment of $1.4 million.  The merger agreement contains representations and warranties and covenants customary for a transaction of this nature.  The total consideration is as follows (in millions of dollars):Cash consideration paid$425.0 Estimated cash acquired13.6 Estimated net working capital adjustment1.4 Total cash consideration440.0 Additional consideration payable3.4 Net working capital adjustment1.4 Total consideration$444.