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Labor SMART, Inc. to explore sale of six branch locations

Georgia-based Labor SMART, Inc. has announced that it is exploring the sale of six Labor SMART branch locations to The Staffing Group, Ltd.


The proposed arms-length transaction would be structured as an asset sale in which Labor SMART, Inc. would receive $1.3m in cash, $1.3m in restricted stock of TSGL, and $1m in a senior secured convertible debenture with a maturity date 24 months from the closing date of the transaction. The company would retain its open accounts receivable at time of close and would continue to operate its remaining branch locations. Labor SMART stated that the six branch locations included in the sale would continue to operate under the laborSMART™ brand and no staff changes would be necessary.


Ryan Schadel, president and CEO of Labor SMART, Inc., commented, "Executing a transaction with this structure allows Labor SMART to monetize some of its operating assets while still participating in the upside performance of those assets via our equity stake in The Staffing Group as well as consolidated financials. All cash received in the transaction would be used to eliminate our remaining convertible debt."


"I believe consummating this transaction would unlock hidden value on our balance sheet and provide some clarity and certainty to Labor SMART shareholders (co-owners) that we have the desire, resources and financial ability to clean up our balance sheet and share structure. Furthermore, this transaction would allow us to invest ongoing resources into the development and launch our Skillcorps™ platform and seek revenue growth from the remaining Labor SMART locations without the heavy weight of toxic debt on our balance sheet."


"As The Staffing Group, Ltd. executes its recently announced acquisition strategy, Labor SMART stands to gain much from its equity position, which can later be monetized or distributed to shareholders through a share dividend of TSGL. A stock dividend of $1.3m would be an excellent way of rewarding the co-owners that have seen the Labor SMART vision and remained faithful during the difficult last two years."



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