Kelly to Acquire Motion Recruitment Partners

Transformational acquisition strengthens scale and capabilities of Kelly’s staffing and consulting solutions across technology, telecommunications, and government specialties in North America, and recruitment process outsourcing solutions globally. Let’s go inside the deal and preview some past acquisitions.

May 6, 2024 – Global specialty talent solutions provider Kelly has entered into a definitive agreement to acquire Motion Recruitment Partners, LLC (MRP), from Littlejohn & Co., LLC, a private investment firm based in Greenwich, CT. Under the terms of the agreement, Kelly will acquire MRP for $425 million in cash to be paid at close, with additional earnout potential of up to $60 million based on certain performance criteria. The company expects to fund the transaction through debt and available capital, including the rapid redeployment of more than $100 million from the sale of Kelly’s European staffing operations in January 2024. The transaction is expected to close in the second quarter of 2024, subject to receipt of required regulatory approvals and other customary closing conditions.

“We look forward to welcoming MRP to the Kelly team in what is a transformational step forward on our journey to sharpen the company’s focus on higher-margin, higher-growth specialty outcome-based and staffing services in North America, and global RPO and MSP solutions,” said Peter Quigley, president and CEO of Kelly. “MRP’s portfolio of businesses are an exceptional fit for Kelly’s SET and OCG segments, adding extensive expertise and an established presence in attractive end-markets. Likewise, Kelly’s breadth of resources and culture of collaboration form a strong foundation upon which MRP will reach extraordinary new heights.”

“There are so many valuable and complementary aspects to this new partnership and both companies have a lot to learn and gain from each other,” said Beth Gilfeather, CEO of MRP. “We are excited to begin this new chapter to become part of the exceptional Kelly story and are very motivated to be a driving force behind the significant growth goals that lie ahead.”

The transaction will significantly build upon Kelly’s solutions portfolio, which includes Kelly Science, Engineering & Technology (SET), life sciences and engineering staffing provider, and a provider of technology, telecommunications, and government workforce solutions; KellyOCG, a provider of RPO and managed service provider MSP solutions; Kelly Professional & Industrial, an industrial staffing provider; and Kelly Education, a provider of K-12 education talent.

Following the close of the transaction, MRP will deliver services through its existing operating companies and brands with the goal of expanding Kelly’s capabilities and significantly increasing market share across several key areas:

• Motion Recruitment’s technology staffing and consulting business will significantly expand Kelly SET’s delivery platform and establish the business as a top ten provider of tech talent solutions in the U.S.;

• Sevenstep will bring an industry leading brand and highly attractive client base in both RPO and MSP to elevate KellyOCG’s RPO segment to consistently rank in the top five globally;

• Motion Telco will add a complementary client portfolio and set of delivery capabilities to Kelly’s existing telecommunications specialty to create a market-leading telecommunications offering; and

• TG Federal will bring a dedicated new platform in government technology subcontracting with strong partnerships to build upon Kelly SET’s success in the government space.

Enhancing Revenue Growth

In alignment with Kelly’s long-term strategy, the acquisition of MRP will enhance the revenue growth potential of the company and accelerate EBITDA margin expansion. It will build upon the significant EBITDA margin expansion Kelly has delivered through actions implemented in 2023 and the sale of the company’s European staffing operations in January 2024.

“We are proud to have partnered with MRP’s strong leadership team during an important period of growth and evolution,” said Drew Greenwood, managing director, Littlejohn. “During our ownership period, MRP executed on a number of organic and inorganic initiatives that positioned it as a premier talent solutions provider with particular strength and depth in the technology market. We wish the company continued success as part of Kelly moving forward.”

The acquisition of MRP will be the largest in Kelly’s history and follows eight acquisitions completed and integrated since 2017 as part of the company’s strategy to pursue inorganic investments in higher-margin, higher-growth specialties. Kelly’s inorganic strategy has been enabled by a series of strategic actions to unlock significant capital and optimize the company’s operating model, including: selling its European staffing operations; monetizing non-core real estate holdings; unwinding its cross-shareholding arrangement with Persol, reducing its ownership interest in PersolKelly, its Asia-Pacific staffing joint venture; and selling its operations in Brazil and Russia.

Kelly will provide additional details about this transaction during its upcoming first-quarter earnings conference call on May 9, 2024. Houlihan Lokey is serving as financial advisor to Kelly with Jasso Lopez PLLC serving as its legal counsel. Robert W. Baird is serving as the financial advisor to MRP with Baker Hostetler serving as its legal counsel.

Recent Deals

Acquisitions and consolidations continue to make news in the recruiting industry, with a number of notable purchases in recent months. And it’s not just executive search firms. Technology-based outfits have also been in on the action. Here is a sampling from the Hunt Scanlon Media archives:

ZRG, a global talent advisory firm and portfolio company of RFE Investment Partners, has acquired Ignata Finance Group, a U.K.-based executive search & finance recruitment and interim placement business. “Partnering with Ignata will enable our European growth strategy both in private equity but across our shared global customers, especially in the U.K.,” said Larry Hartmann, CEO of ZRG. “Adding Ignata to the family of ZRG companies puts us another step closer to true global talent advisory.” Founded in 2017, Ignata partners with VC, PE, and listed organizations seeking chief financial officers and their teams. “We continue our commitment to build a world-class business, employing passionate consultants that are experts in their fields. The partnership with ZRG marks a pivotal moment in our global expansion,” said Ben Searls, founder of Ignata. “By joining forces with ZRG, we are not only enhancing our C-suite capabilities but also broadening our reach internationally.”

Global talent provider True has acquired Bleeker, an executive coaching and assessment company. Bleeker’s assessments, derived from neuroscience, and their inquiry-based coaching services have been rebranded as True Advance and are now part of True’s platform of products and services. “Through integrated assessment and coaching, True has enhanced our comprehensive talent management platform, solidifying our role as strategic partners to businesses building their leadership,” said Joe Riggione, co-founder and CEO of True. “True Advance provides leaders with invaluable insights about themselves, while simultaneously offering companies transparency into prospective hires’ performance and alignment with the existing leadership team dynamics.”

Paris-headquartered search firm Alexander Hughes has acquired Chicago-based DSML Executive Search. Financial terms of the deal were not disclosed. “The move marks a significant milestone in Alexander Hughes’ global growth strategy, positioning the firm as the global executive search and leadership firm of choice for businesses and corporations worldwide,” the search firm said. “The acquisition includes two new offices, one in Chicago and one in Boston.” In addition, Alexander Hughes will retain Myriam Le Cannellier, co-founder and director of DSML Executive Search, who becomes the managing partner of Alexander Hughes USA, and her team of experienced executive search professionals. “This acquisition marks a pivotal moment for our group,” said Julien Rozet, CEO of Alexander Hughes. “We are very proud to strengthen our presence in the U.S. and to have Myriam Le Cannellier and her team at the helm. Her expertise aligns perfectly with our commitment to deliver the highest standard of executive search and leadership advisory services globally.”

The Elevate Sports Ventures agency has acquired SRI and launched Elevate Talent, a new executive search and global talent advisory practice. The new firm will recruit senior leaders across sports, entertainment, media, lifestyle, technology, and gaming. Elevate is led by Al Guido, who also serves as president of the NFL’s San Francisco 49ers.  Jim Chaplin, formerly CEO of SRI, will become global president of Elevate Talent. In his 14 years at the helm of SRI, Mr. Chaplin and his management team have spearheaded the firm’s transformation from a U.K.-based sports specialist firm to a global company in the executive search space, helping organizations with board structure, governance, and C-suite issues with talent and advisory solutions. “For the team at SRI, becoming part of Elevate feels like a perfect match,” said Mr. Chaplin. “We share a foundation in the world of sports and have used that particular vantage point to deliver for clients across a wide range of consumer-facing sectors. Our common experience, aligned to a rigorous, data-driven approach, gives us the tools to set organizations up for success.”

Related: Hunt Scanlon Media Launches M&A Advisory Service for Recruiters

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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