Labor Smart (OTCBB: LTNC), an industrial staffing provider, is exploring the sale of six of its branch locations to The Staffing Group Ltd. (OTCBB: TSGL) and received several acquisition inquiries following the disclosure on Friday.

The Staffing Group, headquartered in Kennesaw, Ga., provides temporary staffing to construction, light industrial, refuse, ship repair and stevedoring companies. It entered into a licensing agreement with Labor Smart in December that allows The Staffing Group to utilize the Labor Smart brand in all future openings. The Staffing Group also last week announced it plans to acquire a North Dakota industrial staffing firm.

The proposed sale announced Friday is an arms-length transaction structured as an asset sale. Labor Smart would receive $1.3 million in cash, $1.3 million in restricted stock of The Staffing Group, and $1 million in a senior secured convertible debenture with a maturity date 24 months from the closing date of the transaction. Labor Smart would retain its open accounts receivable at time of close and would continue to operate its remaining branch locations. The six branch locations included in the sale would continue to operate under the labor Smart brand and no staff changes would be necessary.

“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,” Schadel said. “All cash received in the transaction would be used to eliminate our remaining convertible debt."

On Monday, Labor Smart received a formal non-binding letter of intent from an unrelated third party seeking to acquire the operating assets of eight branch locations. The proposed transaction includes cash consideration of $2.5 million and Labor Smart would retain its open accounts receivable from the operating locations.

“Over the three day weekend, I received four separate inquiries from parties interested in acquiring some or all of our operations,” said Chairman and CEO Ryan Schadel. “It goes without saying that we have little interest in a complete liquidation without an above market offer. However, the formal [letter of interest] we received is somewhat competitive to the transaction we laid out to shareholders on February 12, 2016, and as such will be reviewed carefully. We will respond promptly and appropriately, keeping the best interest of our long term shareholders in mind.”

Labor Smart operates 21 branch locations in the Southeast and Central US. In August, it sold five branch offices to Harris Ventures Inc., a Georgia corporation, for $1,025,000 in cash.