What total consideration did Management Recruiters pay for the acquisition of Snelling Staffing?

According to Management Recruiters' 2024 Franchise Disclosure Document, the company acquired Snelling Staffing on March 1, 2021, for a total consideration of approximately $17.9 million. The acquisition involved obtaining substantially all of Snelling's operating assets and assuming certain liabilities. This transaction was formalized under an Asset Purchase Agreement dated January 29, 2021.

The acquisition was executed through HQ Snelling Corporation, a wholly-owned subsidiary of Management Recruiters. In addition to the initial purchase price, HireQuest, Inc. agreed to advance $2.1 million to the sellers to facilitate the settlement of accrued payroll liabilities that HQ Snelling assumed as part of the agreement.

Following the acquisition, some Snelling locations transitioned to the HireQuest franchise model, signing HireQuest franchise agreements while continuing to operate under the Snelling tradename. This indicates a strategic move by Management Recruiters to integrate Snelling's operations while retaining brand recognition in certain markets.

The FDD also notes that the fair values of the acquired assets and assumed liabilities were adjusted after the acquisition date, including changes to accounts receivable, current assets and liabilities, and other liabilities, ultimately affecting the bargain purchase gain. These adjustments reflect the ongoing reconciliation of net working capital following the acquisition.