Offers a Significant Premium of 61% to TrueBlue Stockholders HireQuest's High-Margin Franchising Model to drive near-term profitability and enhanced value for shareholders GOOSE CREEK, SC / ACCESS Newswire / May 13, 2025 / HireQuest, Inc. (NASDAQ:HQI) announced today that it has submitted to the Board of Directors of TrueBlue, Inc. $(TBI)$ a proposal to acquire all of the outstanding shares of common stock of TrueBlue for $7.50 per share. The consideration would be paid in registered shares of HireQuest common stock and would not be subject to any financing contingency. HireQuest's proposal represents a 61% premium to the closing price of TrueBlue's common stock on May 12, 2025 of $4.65 and 67% and 45% premiums over the 30-day and 60-day VWAPs, respectively. This transaction would mark HireQuest's 16(th) acquisition in the staffing industry. HireQuest has a history of profitability and successful acquisition integration including the conversion of traditional branch offices into thriving franchises. The staffing industry is changing, and HireQuest's unique franchising platform gives it and its franchisees the flexibility and efficiency to drive a profitable business throughout various economic cycles. It is this flexibility and efficiency that is so desperately needed by TrueBlue who has seen its revenues and profitability erode over the last decade. This erosion has correspondingly led to a substantial decrease in share price and shareholder value over that time period as well. HireQuest has been pursuing this transaction for almost two years and has continually been rebuffed by TrueBlue's management team and Board of Directors. However, as TrueBlue continues to struggle, HireQuest felt its proposal was too important and valuable to TBI shareholders to not move forward and make it publicly known. As a result, a final letter was submitted to the TrueBlue board on May 9, 2025. "While we are frustrated that TrueBlue has refused to engage with us, we are excited to finally move forward with this very strategic and value-creating opportunity," said Rick Hermanns, CEO of HireQuest. "We have tremendous respect for what TrueBlue has built and would like nothing more than to do a friendly, negotiated deal that could benefit everyone. However, there is just too much value and upside for the shareholders of both companies to sit on the sidelines any longer. We are offering TrueBlue shareholders a substantial premium day one but also the opportunity to invest in a larger, higher-margin industry leader going forward with more upside potential and less downside risk. We have a solution for TrueBlue's woes - a lucrative high-value one - and the shareholders should know." Mr. Hermanns went on to say "Our preference here is to engage with management in order to structure a negotiated deal that is beneficial to all stakeholders. If successful, then we would consider adding a cash component to the consideration structure for shareholders preferring immediate liquidity. Furthermore, we would consider increasing the offer price as it currently incorporates risks and uncertainties that may not exist." Below is the full text of the letter that was sent to the TrueBlue Board of Directors on May 9, 2025: May 9, 2025 The Board of Directors of TrueBlue, Inc. 1015 A Street Tacoma, WA 98402 Attention: Ms. Taryn R. Owen, Chief Executive Officer Attention: Mr. Jeffrey B. Sakaguchi, Board Chair Re: Strategic Acquisition Discussions Dear Members of the Board: As conveyed to you in conversations dating back to 2023 and as detailed in our offer letters submitted to you in January and February of this year, the Board of Directors and management of HireQuest, Inc. ("HQI") strongly believe that a combination of HQI and TrueBlue, Inc. ("TBI" or the "Company") presents an exciting opportunity to create significant value for our respective shareholders. The combined company would be a stronger, higher-margin, and more strategically positioned company with superior growth prospects and a path to enhanced shareholder value. As a result, we are disappointed that you have continued to decline our multiple offers, and once again ask that you allow us to meet in order to better explain the benefits, both immediate and long-term, available to your shareholders from the combination of our two companies. While our steadfast commitment to this opportunity has not changed, the terms of our offer have been modified to reflect the updated financial performance of the Company since our previous offers. Particular attention has been given to the continued earnings erosion as well as the material increase in debt as disclosed in your recent Q1 financials along with details surrounding the recent acquisition of HSP. In addition, it appears as though recent earnings have been aided by a reduction in the Company's Workers' Compensation Reserves, which is a concerning and unsustainable trend. As a result, we are prepared to move forward immediately with the acquisition of all common shares of TBI at $7.50 per share. This represents a substantial premium of 76% over yesterday's closing price of $4.27 as well as premiums of 65% and 44% over the Company's 30-day and 60-day VWAP respectively. We are convinced that this offer provides a unique opportunity for TBI shareholders to achieve a value that doesn't otherwise exist in this market. In addition to the premium itself, we believe that even greater value and returns can be generated by holding shares of the combined company. As a result, we are offering your shareholders the purchase price in the form of shares of HQI. We believe such a transaction would qualify as a tax-free reorganization under IRC Sec. 368 and could afford our collective shareholders the ability to participate in the upside of a higher-margin, higher-growth combined company. We recognize that our previous offers had contained a meaningful cash component to offer your shareholders while this offer is 100% stock. We felt that this was prudent given the recent financial performance of the Company, however, to the extent we are able to engage and pursue a negotiated transaction with you, we would be willing to reinstate a cash option for shareholders who would prefer liquidity at closing. Furthermore, if we are able to work directly with management on a deal, we feel like the terms, including price, could be improved as they currently factor in risks and uncertainties that may not exist. As you know, our interest in TBI and a business combination is not new, and we have been trying to initiate strategic discussions with you for almost two years. We are convinced there is incremental value to be had by both companies' shareholders for the following reasons: -- TBI shareholders are able to realize an immediate and significant premium over the trading value of TBI shares -- HQI has a unique franchise model that provides efficiency and flexibility within the workforce solutions industry that has resulted in a long history of profitability and growth through various economic cycles -- Integrating TBI's extensive nationwide branch system into HQI's proven high-margin franchise-based platform will create meaningful incremental profits and value for both companies' shareholders -- The combined company will be one of the most comprehensive staffing providers in the industry with an extensive yet asset-light reach providing more upside potential along with significantly less downside risk than either company on a stand-alone basis -- HQI has already completed its due diligence of publicly available information, and in the event a definitive agreement is reached, the likelihood of a timely and successful consummation of the transaction is very high -- HQI has a proven track record of successfully completing 15 acquisitions and integrating strategic combinations in a mutually beneficial manner While we are prepared to purchase all of TBI's shares in a transaction, we also want to stress our flexibility for alternative structures. For example, if TBI would prefer to remain an independent, publicly traded company, then HQI would be willing to acquire just the PeopleReady, Inc. subsidiary from TBI and would be willing to pay up to $150 million in cash subject to additional diligence. This cash could be used by TBI for any number of strategic purposes including a special dividend to its shareholders or used for strategic acquisitions and further diversification of the business. Again, we feel strongly about moving forward, and want to stress our flexibility to find a solution that benefits all stakeholders. We remain ready to meet with you and your representatives at your earliest convenience. We continue to prefer to work together with management and the Board to complete a friendly, negotiated transaction, and we are prepared to commit all necessary resources to do so. If you are willing to engage in a negotiated transaction, we will send over a draft merger agreement immediately and work toward an expeditious close. However, given the importance and potential value of this offer to your shareholders, we feel that if you are not willing to engage with us then we will take this offer directly to your shareholders. We trust that the Board of Directors will give this proposal serious consideration. If we have not received a favorable response by 5:00p PT Monday, May 12, 2025, then we will have no choice but to go public with our interest at that time. We hope to hear from you shortly. Very truly yours, /s/ Richard F. Hermanns Richard F. Hermanns Chief Executive Officer CC: TBI Board of Directors Jeffrey B. Sakaguchi Taryn R. Owen Colleen B. Brown
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May 13, 2025 08:57 ET (12:57 GMT)
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