- Kronos and Ultimate Software recently entered a definitive merger agreement to create a $22 billion company. These are the details.
Kronos and Ultimate Software recently entered a definitive merger agreement to create a $22 billion company. Through the merger, Kronos and Ultimate Software combined will become one of the world’s largest cloud companies.
The deal will create the world’s most innovative human capital management (HCM) and workforce management company to help organizations across all industries manage their people more effectively with an unparalleled combination of cloud solutions. And the combined company will have an enhanced scale and a stronger position in the fast-growing HCM marketplace.
Kronos and Ultimate both each have a proven track record of delivering the industry’s most innovative solutions to help organizations around the world drive better business outcomes and achieve a competitive advantage and create engaged workforces. And the new company will bring together the best of each company’s solutions: Ultimate’s UltiPro HCM and Employee Experience products with Workforce Dimensions from Kronos, Kronos Workforce Ready, and other solutions from Kronos.
Following the closing of the deal, the combined company will have revenues of approximately $3 billion, more than 12,000 employees worldwide, and an enterprise value of $22 billion with further plans for growth, including the addition of 3,000 employees over the next three years.
Aron Ain, Chairman and CEO at Kronos, will be the CEO and chairman of the combined company. And the new company will be jointly headquartered in Lowell, Massachusetts and Weston, Florida with dozens of offices around the world.
Hellman & Friedman LLC (H&F), the controlling shareholder of both Kronos and Ultimate will be the controlling shareholder of the newly formed company. And following H&F, private equity funds managed by Blackstone will be the largest minority investor followed by GIC, Canada Pension Plan Investment Board (CPP Investments), and JMI Equity.
The all-stock merger has been unanimously approved by the boards of directors at both companies and is expected to close at the end of March. And Morgan Stanley & Co. LLC (for Kronos) and Goldman Sachs & Co. LLC (for Ultimate) acted as financial advisors and Simpson Thacher & Bartlett LLP acted as legal counsel on the transaction.
Key Quotes
“I have never been more excited in my 40 years at Kronos! Combining our passionate and extremely talented Kronos and Ultimate teams will create a company that is truly People Inspired. Together, we will expand the value we deliver to customers and create the industry’s most comprehensive human capital management and workforce management solution for organizations around the world. With a combined 70 years in business, we are poised for tremendous success. For our employees, customers, and partners there is an even better future ahead. Our top priority as we complete this merger is to ensure a smooth transition for our people and continue to exceed our customers’ expectations.”
– Aron Ain, CEO at Kronos
“The combination of Ultimate and Kronos paves the way to deliver the next generation of employee-facing solutions that will set the standard for the workforce of the future. This merger will enable our more than 12,000 inspired people around the world to deliver innovation in human capital management faster than ever before. Both companies remain fully committed to their core strengths as well as to the combined benefits that the new company will bring to employees and customers.”
– Adam Rogers, Chief Executive Officer at Ultimate Software
“The merger of Kronos and Ultimate brings together two exceptional, industry-leading companies that are dedicated to delivering great technology services and – just as importantly – creating outstanding employee cultures of their own. After many years of a growth-oriented partnership with Kronos, and a more recent, successful relationship with Ultimate, we have strong conviction in the deep compatibility of these two companies and the unlimited growth potential of this sector. We know that by creating an inspiring place to work and putting people first, this combined company will thrive for years to come.”
– David Tunnell, Partner of Investment Committee at Hellman & Friedman
“We believe the combination of Kronos and Ultimate will create a cloud industry leader in human capital management and workforce management software, and one of the best companies to work for in technology globally.”
– Martin Brand, Senior Managing Director at The Blackstone Group
