8-K: Atlantic International Acquires Circle8, Forms $1.2B Global Workforce Platform

Atlantic International Corp. completed the acquisition of Circle8 Group B.V., creating a diversified global workforce solutions platform with approximately $1.2 billion in annual revenue.

Summary

• Atlantic International Corp. (ATLN) completed the acquisition of Circle8 Group B.V. (Circle8) on January 23, 2026, a Netherlands-based company specializing in IT staffing and recruiting professionals in Europe.
• Circle8 Group generated approximately US $780 million (unaudited) in revenues in 2025 and is projected to reach $1 billion organically in 2026.
• The acquisition creates a combined global workforce solutions platform with approximately $1.2 billion (unaudited) in annual revenue.
• The consideration for the acquisition included 12,516,070 shares of Atlantic common stock (representing 19.99% of outstanding shares) issued to Guus Franke, Circle8's founder, and a convertible promissory note for $161,961,751.20 issued to Axiom Partners GmbH (Circle8's previous owner).
• The convertible note is convertible into 53,291,744 shares of Atlantic common stock, subject to Atlantic stockholder approval.
• An earnout provision entitles Axiom to an additional US $2.5 million if Circle8 Group's revenue exceeds EU 600 million for calendar year 2026.
• A one-time profit payment, equal to Circle8 Group's net profit for the year ended December 31, 2025 (minus 2026 liquidity payments), is also payable to Axiom.
• Guus Franke was appointed Executive Chairman of Atlantic's Board of Directors, increasing the board size from five to six members.
• Employment agreements for CEO Jeffrey Jagid and Secretary/General Counsel Michael Tenore were amended, extending their terms to January 31, 2031, and increasing their annual base salaries and bonuses, effective January 1, 2026.

Sentiment

Score: 8

Explanation: The acquisition of Circle8 Group is a highly strategic move that significantly expands Atlantic International Corp.'s market reach, diversifies its service offerings into high-growth IT sectors, and substantially increases its revenue scale. The continuity of Circle8's founder in a key leadership role and the strong growth trajectory of the acquired business are significant positives. While there's potential for dilution from the convertible note and increased executive compensation, the overall strategic benefits and growth prospects are very strong.

Positives

• Creates a diversified global workforce solutions platform with approximately $1.2 billion (unaudited) in annual revenue.
• Expands Atlantic's geographic footprint into key European markets, complementing its North American industrial staffing operations.
• Adds high-growth IT and technology staffing capabilities, including specializations in artificial intelligence, security, and automation.
• Circle8 Group's strong financial performance, with $780 million (unaudited) in 2025 revenue and a target of $1 billion organically in 2026, indicates robust growth potential.
• Ensures founder-led continuity and governance alignment with Circle8 founder Guus Franke joining Atlantic's Board as Executive Chairman while retaining his CEO role at Circle8.
• Enhances scale and operating leverage, supporting long-term margin expansion and cash flow generation for the combined entity.
• Increases revenue visibility, driven by Circle8's long-term government contracts and blue-chip enterprise customers.
• Circle8's 85% success rate in economic value on government tenders in 2025 demonstrates strong operational execution and market penetration.
• Circle8's appointment as the official IT global talent-matching partner for the Aston Martin Aramco Formula One Team underscores its ability to deliver mission-critical talent solutions in highly complex, performance-driven environments.

Negatives

• The acquisition involves a significant convertible promissory note of $161,961,751.20, which could lead to substantial dilution if fully converted into 53,291,744 shares of common stock.
• Full conversion of the convertible note and issuance of contingent shares are subject to Atlantic stockholder approval, introducing a potential uncertainty.
• Increased executive compensation for Jeffrey Jagid (CEO) and Michael Tenore (Secretary and General Counsel), including higher base salaries and bonuses, and a special bonus for a potential $5 million financing in 2026.
• The company will incur costs related to preparing and filing a proxy statement and registration statements for the shares.
• Atlantic is responsible for providing all future funding and liquidity to Circle8 Group in the ordinary course of business.

Risks

• Failure to obtain Atlantic Stockholder Approval for the conversion of the Convertible Note and issuance of Contingent Share Consideration.
• Unforeseen liabilities related to the acquisition.
• Future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, and future prospects may differ materially from expectations.
• The anticipated benefits of the acquisition may not be realized or may not be realized within the expected time period, if at all.
• The acquisition could disrupt and/or harm current plans and operations of Atlantic or Circle8 Group, including diverting management's time and attention.
• Inability of Atlantic and Circle8 Group to successfully integrate their businesses and achieve anticipated synergies and value creation potential.
• Adverse reactions or changes to business relationships resulting from the acquisition.
• Legislative, regulatory, and economic developments and changes in laws, regulations, and policies affecting Atlantic and Circle8 Group.
• Potential business uncertainty, including the outcome of commercial negotiations and changes to existing business relationships that could affect financial performance and operating results.
• Acts of terrorism or outbreak of war, hostilities, civil unrest, and other political or security disturbances.
• Impacts of pandemics or other public health crises, including effects of government responses on people and economies.
• General economic, political, and market factors affecting the companies or the acquisition.
• Clawback provisions for up to 10% of Conversion Shares (or 3% of outstanding common stock) if Axiom or Circle8 Group breaches certain representations or warranties, or in case of fraud.

Future Outlook

The combined company anticipates unlocking meaningful value through expanded geographic reach, broader customer coverage, and cross-selling opportunities. Circle8 Group is on track to reach $1 billion organically in 2026, reflecting strong demand and long-term contract visibility. Atlantic aims to build a diversified, multi-billion-dollar workforce solutions platform.

Management Comments

• "This acquisition creates immediate strategic value through complementary capabilities, expanded geographic reach, cross-selling opportunities, and a more balanced and diversified revenue mix." Jeffrey Jagid, CEO of Atlantic International Corp.
• "Circle8's exceptional growth trajectory, blue-chip client relationships, and market-leading position in European IT staffing meaningfully advance our strategy to build a scaled, diversified global workforce solutions business." Jeffrey Jagid, CEO of Atlantic International Corp.
• "We're not just acquiring a company—we're welcoming a team of proven operators who have built something remarkable in one of the world's most competitive markets." Jeffrey Jagid, CEO of Atlantic International Corp.
• "Joining Atlantic International represents an exciting new chapter for Circle8. Together, we can offer clients comprehensive workforce solutions across continents and talent categories." Guus Franke, Founder of Circle8 Group.
• "By combining our European technology expertise with Atlantic's North American industrial staffing platform, we create a broader, more resilient value proposition for global enterprises." Guus Franke, Founder of Circle8 Group.

Industry Context

The acquisition positions Atlantic International Corp. as a significant player in the global workforce solutions market, diversifying its existing North American light industrial staffing operations with Circle8's leading European IT and technology talent business. This move aligns with a broader industry trend towards specialized talent acquisition and global service delivery, particularly in high-demand technology sectors like AI, security, and automation. The combined entity aims to leverage cross-regional demand and offer comprehensive solutions to multinational clients.

Comparison to Industry Standards

• Circle8 Group's 85% success rate in economic value on government tenders in 2025 indicates strong performance in securing public sector contracts, which often provide stable, long-term revenue streams.
• Circle8's designation as the official IT global talent-matching partner for the Aston Martin Aramco Formula One Team highlights its ability to deliver mission-critical talent solutions in highly complex and performance-driven environments, suggesting a premium service offering compared to general staffing firms.
• The combined entity's unaudited annual revenue of $1.2 billion positions it as a scaled player in the global workforce solutions market, comparable to mid-to-large tier global staffing firms.

Management Changes

Corporate Governance

Legal Proceedings

• A clawback provision in the Acquisition Agreement allows Atlantic to redeem up to 10% of Conversion Shares (or 3% of outstanding common stock) from Axiom for material breaches of representations/warranties or fraud by Axiom/Circle8 Group.
• Atlantic agreed to indemnify Axiom and Circle8 from damages under similar conditions.
• Employment agreements for Jeffrey Jagid and Michael Tenore include a 'Confession of Judgment' clause, allowing them to file an executed confession of judgment against the Company and its subsidiaries for severance upon an Event of Default.

Related Party Transactions

• Axiom Partners GmbH, the seller of Circle8 Group, is 100% owned by Mr. Guus Franke.
• Mr. Guus Franke received 12,516,070 shares of Atlantic common stock and was appointed Executive Chairman of Atlantic's Board of Directors.
• Axiom received a convertible promissory note for $161,961,751.20 as part of the acquisition consideration.
• Mr. Franke agreed to forgive all indebtedness owed to him by any and all members of Circle8 Group as a condition of closing.
• E.F. Hutton & Co. LLC, financial advisor to Axiom, is to be paid 4,000,000 shares of Atlantic common stock for its services.

Stakeholder Impact

• Shareholders: Potential for significant value creation through strategic growth and diversification, but also potential for dilution from the conversion of the promissory note and issuance of contingent shares. Required to vote on the conversion of the convertible note.
• Employees (Circle8 Group): Continued employment under existing agreements, with potential for stock incentives as agreed between Axiom and Atlantic.
• Employees (Atlantic International Corp.): Enhanced career opportunities within a larger, more diversified global company. Key executives (CEO, General Counsel) received extended terms and increased compensation.
• Customers: Benefit from expanded geographic reach and broader service offerings across industrial, IT, and technology talent categories.
• Suppliers: Potential for expanded business opportunities with a larger, global entity.
• Creditors: The convertible note represents a significant financial obligation for Atlantic.

Next Steps

• Atlantic to prepare and file a proxy statement with the SEC within five business days of receiving all required Circle8 Group financial statements, for soliciting stockholder approval of the Convertible Note conversion and Contingent Share Consideration.
• Atlantic to call, give notice of, convene, and hold a special meeting of stockholders to approve the Convertible Note Consideration as soon as practicable after SEC review of the proxy statement.
• Atlantic to file an initial registration statement on Form S-3 within ten business days after receiving all required Circle8 Group financial statements, for resale of the Initial Share Consideration.
• Atlantic to file a second tranche registration statement for resale of Conversion Shares or Contingent Share Consideration promptly after their issuance.
• Atlantic to obtain 2026 Circle8 Group Audited Financial Statements prior to March 31, 2027, for earnout calculation.
• Atlantic to pay a one-time profit payment to Axiom based on Circle8 Group's 2025 net profit, by the earlier of sufficient funds or three years from the closing date.

Key Dates

Recommendation

The acquisition of Circle8 Group is a transformative event for Atlantic International Corp., significantly expanding its operational scale, geographic footprint into high-growth European IT staffing markets, and diversifying its revenue streams. The combined entity's pro forma annual revenue of $1.2 billion and Circle8's organic growth trajectory to $1 billion in 2026 demonstrate strong potential for future financial performance. The integration of Circle8's founder, Guus Franke, as Executive Chairman ensures leadership continuity and expertise. While the convertible note introduces potential dilution, the strategic benefits of market diversification, enhanced operating leverage, and cross-selling opportunities outweigh these concerns, positioning Atlantic for substantial long-term shareholder value creation. This strategic move makes ATLN a compelling 'strong buy' for investors seeking exposure to a rapidly expanding global workforce solutions platform.

Keywords

Atlantic International Corp, Circle8 Group, Acquisition, IT Staffing, Workforce Solutions, Europe, North America, Nasdaq, ATLN, Artificial Intelligence, Cybersecurity, Automation, Convertible Note, Corporate Governance, Executive Compensation, M&A