Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 10

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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 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 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. The earnout period concluded in the first quarter of 2025 and no further liability will be recognized (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):Cash consideration paid$425.0 Cash acquired13.6 Net working capital adjustment1.4 Total cash consideration440.0 Additional consideration payable3.4 Net working capital adjustment1.4 Total consideration$444.8 

14 

KELLY SERVICES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)(UNAUDITED)

As of May 2025, the purchase price allocation for this acquisition is final.  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, with MRP’s Sevenstep business included in ETM and the remaining operations in SET.Disposition of EMEA Staffing OperationsOn January 2, 2024, the Company completed the sale of its E