425: HireQuest Urges TrueBlue Shareholders to Consider Acquisition Offer After Board Rejection

HireQuest publicly responds to TrueBlue's rejection of its $7.50 per share acquisition offer, appealing directly to shareholders and highlighting the potential benefits of the merger.

Summary

• HireQuest is disappointed that TrueBlue's Board rejected their $7.50 per share acquisition offer.
• HireQuest believes the offer provides superior value to TrueBlue's shareholders compared to its current stand-alone prospects.
• HireQuest has been trying to engage with TrueBlue for nearly two years regarding a strategic combination.
• HireQuest claims TrueBlue has declined from $2.8 billion in revenue and $134 million in EBITDA in 2016 to $1.6 billion in revenue and negative EBITDA today.
• HireQuest believes TrueBlue's PeopleReady strategy is no longer competitive.
• HireQuest's franchise model is uniquely suited to improve TrueBlue's performance.
• HireQuest is open to increasing its offer and adding a material cash component if TrueBlue engages in good faith discussions.
• HireQuest is asking TrueBlue shareholders to consider investing in a larger, higher-margin combined company at $7.50 per share versus investing in an unprofitable company trying to turn itself around.

Sentiment

Score: 6

Explanation: The sentiment is mixed. HireQuest is confident in its offer and the potential benefits of the merger, but the document also highlights TrueBlue's poor performance and the risk of the deal not going through.

Positives

• HireQuest believes its franchise model can improve TrueBlue's performance.
• HireQuest is open to increasing its offer and adding a cash component.
• HireQuest is offering TrueBlue shareholders a premium for their shares.

Negatives

• TrueBlue's Board rejected HireQuest's acquisition offer.
• TrueBlue's revenue and EBITDA have significantly declined in recent years.
• HireQuest claims TrueBlue's PeopleReady strategy is no longer competitive.
• TrueBlue has underperformed the industry seven out of the last eight years, according to Staffing Industry Analysts.

Risks

• The acquisition may not be completed.
• TrueBlue may not cooperate with HireQuest.
• HireQuest may be unable to achieve expected synergies and operating efficiencies.
• Integration of TrueBlue's operations may be more difficult, time-consuming, or costly than expected.
• Operating costs, customer loss, and business disruption may be greater than expected.
• Retention of key employees may be difficult.
• General economic conditions may be less favorable than expected.

Future Outlook

HireQuest believes a strategic combination with TrueBlue would create a larger, higher-margin combined company and unlock value currently hidden within TrueBlue.

Management Comments

• Rick Hermanns, Chief Executive Officer of HireQuest, stated that they are disappointed that TrueBlue's Board continues to refuse to engage with them.
• Rick Hermanns believes that TrueBlue's existing strategy, specifically that of PeopleReady, is no longer competitive.
• Rick Hermanns stated that HireQuest's franchise-based approach to staffing will unlock value currently hidden within the company.
• Rick Hermanns is posing the question to shareholders: 'Would you rather invest in a larger, higher-margin combined company at $7.50 per share, or invest at a much lower pre-offer price in an unprofitable company trying to turn itself around from a decade of declines?'

Industry Context

The announcement highlights the competitive pressures within the staffing industry and the potential benefits of consolidation and franchise models.

Comparison to Industry Standards

• The document mentions that TrueBlue has underperformed the industry seven out of the last eight years, according to Staffing Industry Analysts.
• Without specific competitor data, it's difficult to provide a detailed comparison, but the implication is that HireQuest's franchise model is performing better than TrueBlue's company-owned model in the current market.

Stakeholder Impact

• Shareholders of TrueBlue are being asked to consider the acquisition offer.
• Employees of TrueBlue could be affected by the potential integration with HireQuest.
• Customers and suppliers of TrueBlue could be impacted by changes resulting from the acquisition.

Next Steps

• HireQuest encourages TrueBlue shareholders to review the TrueBlue Merger Presentation.
• HireQuest may file one or more registration statements, consent solicitation or proxy statements, tender offer statements, prospectuses or other documents with the Securities and Exchange Commission (the SEC).

Key Dates

Keywords

HireQuest, TrueBlue, acquisition, merger, staffing, franchise, shareholders, offer, PeopleReady, EBITDA, revenue