SCHEDULE: Kelly Services Class B Stock: Trust K Sells 92.2% Stake

Terence E. Adderley Revocable Trust K is selling its entire 3,039,940 Class B Common Stock shares of Kelly Services Inc. to Hunt Equity Opportunities, LLC for $106 million upfront, with a potential earnout.

Summary

• Terence E. Adderley Revocable Trust K (Trust K) is selling all of its 3,039,940 shares of Kelly Services Inc. Class B Common Stock to Hunt Equity Opportunities, LLC.
• The initial purchase price for these shares is $106,000,000.
• An additional earnout payment of $15,199,700 is contingent on Kelly Services' market capitalization reaching or exceeding $1,200,000,000 within 48 months following the closing date.
• The 3,039,940 shares represent 92.2% of the outstanding Class B Common Stock and at least 92% of the total voting interest of Kelly Services.
• The closing of the sale is expected to occur on or before January 30, 2026.
• After the sale, Trust K and co-trustees David P. Larsen and William U. Parfet will no longer beneficially own any Class B shares.
• Co-trustee Andrew H. Curoe will continue to beneficially own 42,825 Class B shares held in other trusts.

Sentiment

Score: 6

Explanation: The transaction provides a significant liquidity event for the selling trust with potential upside via an earnout. However, the sale of a controlling stake introduces uncertainty regarding future corporate governance and strategic direction for Kelly Services, and the earnout is not guaranteed. The purchaser's waiver of undisclosed information claims adds a layer of risk for the buyer.

Positives

• Significant liquidity event for Trust K, realizing $106,000,000 upfront from the sale of its Class B shares.
• Potential for an additional $15,199,700 earnout payment if Kelly Services' market capitalization reaches $1.2 billion within four years, indicating a potential upside for the seller.
• The transaction provides a clear exit strategy for a major legacy shareholder.

Negatives

• The sale of a controlling stake (92.2% of Class B, 93.5% for Mr. Curoe including other trusts) could introduce uncertainty regarding future corporate governance and strategic direction under new significant ownership.
• The earnout payment is contingent on a future market capitalization target, which may not be achieved.
• The Purchaser acknowledges the Seller may possess material non-public information and waives claims related to non-disclosure, which could be a concern for the Purchaser if the information is adverse.

Risks

• The closing of the transaction is subject to several conditions, including no legal prohibitions, accuracy of representations and warranties, and performance of covenants by both parties.
• Conditions related to the Company's actions, such as not amending organizational documents, not adopting a stockholder rights plan, or not issuing equity securities outside of ordinary course Class A stock, could prevent or delay closing if violated.
• The earnout payment is not guaranteed and depends on Kelly Services achieving a $1.2 billion market capitalization within 48 months, which is subject to market performance and company operations.
• The Purchaser explicitly waives claims against the Seller for failure to disclose material non-public information, except in cases of fraud or willful misconduct, which places a higher burden on the Purchaser.

Future Outlook

The filing indicates a potential future upside for the seller through an earnout payment if Kelly Services' market capitalization reaches $1.2 billion within 48 months, suggesting an expectation of significant company growth or valuation increase. The transaction itself represents a major shift in the ownership structure of a controlling block of shares.

Industry Context

This transaction represents a significant change in the ownership of a controlling block of Class B shares for Kelly Services, a staffing and workforce solutions company. Such a large block sale to a private equity firm (Hunt Equity Opportunities, LLC) could signal a potential shift in strategic direction or increased pressure for value creation, which is a common trend in mature industries where private equity seeks to optimize operations or pursue M&A. The earnout clause ties the seller's future compensation to the company's market performance, aligning interests with potential growth.

Comparison to Industry Standards

• The sale of a controlling stake (92.2% of Class B shares) to a single entity like Hunt Equity Opportunities, LLC is a common private equity strategy to gain significant influence or control over a company.
• The inclusion of an earnout clause, contingent on achieving a specific market capitalization ($1.2 billion), is a standard mechanism in M&A transactions to bridge valuation gaps and incentivize future performance, often seen in deals where there's uncertainty about future growth or market conditions.
• The explicit waiver by the Purchaser regarding undisclosed material non-public information, while unusual in public filings, is a specific contractual term that highlights the due diligence and risk allocation between sophisticated parties in a private transaction involving public company shares.
• No specific comparable companies, projects, or results are mentioned in the filing to allow for a direct comparison to industry benchmarks.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders (Class B): The sale consolidates a significant portion of Class B voting power under a new entity, Hunt Equity Opportunities, LLC, potentially altering the balance of control and future strategic direction.
• Shareholders (Class A): While the Class A shares are not directly involved in this sale, changes in the controlling Class B ownership could indirectly impact Class A shareholders through shifts in company strategy, governance, or potential future corporate actions.
• Employees: Potential for changes in company strategy or operations under new significant ownership, which could indirectly affect employees.
• Management: New significant shareholder may influence management decisions, board composition, and overall corporate direction.

Next Steps

• Closing of the Share Sale on or before January 30, 2026.
• Transfer of shares from Trust K to Hunt Equity Opportunities, LLC.
• Potential future payment of $15,199,700 earnout if Kelly Services' market capitalization reaches $1.2 billion within 48 months post-closing.

Key Dates

Keywords

Kelly Services, Class B Common Stock, Schedule 13D, Share Purchase Agreement, Hunt Equity Opportunities, Terence E. Adderley Revocable Trust K, Stock Sale, Beneficial Ownership, Corporate Governance, Earnout, Market Capitalization, SEC Filing