Hudson Global (HSON) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a larger, multi-sector holding company with pro-forma annualized revenues of $210 million, enhancing scale, revenue diversification, and positioning for Russell 2000 index inclusion.

• The combined entity, NewCo, will adopt a holding company structure with four reporting segments: Building Solutions, Business Services, Energy Services, and Investments.

• The merger leverages corporate overhead and public company costs to accelerate growth and maximize shareholder value.

• NewCo will serve as a platform for bolt-on acquisitions and organic growth across multiple verticals.

• Board and management will own about 24% of pro-forma shares, aligning interests with shareholders.

Financial terms and conditions

• Stock-for-stock transaction: Hudson will issue 0.23 shares of HSON common stock for each STRR common share, matching the 20-day VWAP trading ratio; preferred stock will be exchanged one-for-one.

• Upon completion, Hudson shareholders will own about 79% and Star shareholders about 21% of NewCo's estimated 3.49 million shares.

• The merger is expected to close in the second half of 2025, pending regulatory and shareholder approvals.

• No impact expected on Hudson's NOL; NewCo expected to maintain NOL protection provisions.

Synergies and expected cost savings

• At least $2 million in annualized cost savings are projected within 12 months post-merger, mainly from eliminating duplicative public company costs.

• These savings are projected to add approximately $0.57 in incremental pro-forma EPS.

• Additional revenue synergies and margin expansion are anticipated as the combined company leverages its expanded capabilities.