Houlihan Lokey Advises Kelly

Transaction: Kelly - Motion Recruitment - Littlejohn Co - Closed

Houlihan Lokey is pleased to announce that Kelly Services, Inc. (NASDAQ:KELYA, KELYB) (Kelly), a leading global specialty talent solutions provider, has acquired Motion Recruitment Partners, LLC (MRP), a portfolio company of Littlejohn & Co., LLC (Littlejohn).

Under the terms of the agreement, Kelly acquired MRP for $425 million in cash, with an additional earnout potential of up to $60 million based on certain performance criteria. The transaction closed on May 31, 2024.

The transformational acquisition strengthens the scale and capabilities of Kelly’s staffing and consulting solutions across technology, telecommunications, and government specialties in North America and recruitment process outsourcing (RPO) solutions globally. Additionally, it provides MRP and its leading brands with a highly invested partner to enable continued growth.

The transaction will significantly build upon Kelly’s market-leading solutions portfolio, which includes Kelly Science, Engineering & Technology (SET), the second and fourth largest life sciences and engineering staffing provider, respectively, and a leading provider of technology, telecommunications, and government workforce solutions; KellyOCG, a top provider of RPO and managed service provider (MSP) solutions; Kelly Professional & Industrial, one of the 10 largest industrial staffing providers; and Kelly Education, the largest provider of K-12 education talent.

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:

  • MRP’s technology staffing and consulting business will significantly expand Kelly SET’s delivery platform and establish the business as a top 10 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.

The acquisition of MRP will be the largest in Kelly’s history and follows eight acquisitions completed and integrated successfully since 2017 as part of the company’s strategy to pursue inorganic investments in higher-margin, higher-growth specialties.

Kelly helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, the company has become an expert in the many industries and local and global markets it serves. With a network of suppliers and partners around the world, Kelly connects more than 500,000 people with work every year. Its suite of outsourcing and consulting services ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, Kelly empowers businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2023 was $4.8 billion.

Established in 1989 and headquartered in Boston, Massachusetts, MRP is the parent company to a group of leading global talent solution providers, including Motion Recruitment (IT staffing and managed solutions), Motion Consulting Group (IT consulting), Motion Telco (IT and telecom solutions), Tech in Motion (Tech networking and events program), TG Federal (government IT subcontracting), and Sevenstep® (RPO, MSP, and TA advisory/consulting).

Littlejohn is a Greenwich, Connecticut-based investment firm focused on private equity and debt investments, primarily in growing middle-market industrial and services companies that can benefit from Littlejohn’s 25+ years of operational and sector expertise. With approximately $8 billion in regulatory assets under management, the firm seeks to build sustainable success for its portfolio companies through a disciplined approach to engineering change.

Houlihan Lokey served as the exclusive financial advisor to Kelly.

Houlihan Lokey’s Human Capital Management team is among the most active M&A advisors in the market, having closed 25 HCM transactions since 2021. This most recent transaction further strengthens Houlihan Lokey’s leadership in the business services universe and highlights continued momentum and leadership in the HCM sector, which includes staffing, recruitment, VMS, MSP, RPO, talent management, and PEO.

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