Paychex – a leading human capital management (HCM) company delivering a suite of technology and advisory solutions in human resources, employee benefits solutions, insurance, and payroll – announced today it has entered into a definitive agreement to buy Paycor HCM, a leading provider of HCM, payroll and talent software in an all-cash transaction for $22.50 per share, representing an enterprise value of about $4.1 billion. This agreement has been approved by the Boards of Directors of both companies.
Based in Cincinnati, Ohio, Paycor has about 2,900 employees, serves over 49,000 clients, and supports about 2.7 million employees across the US. And Paycor’s HCM, payroll, and talent platform was designed to serve organizations of all sizes, from ten to thousands of employees.
Paycor expanded its upmarket position since becoming a public company in 2021 by consistently investing in data, AI, and other cutting-edge technologies. Here is the transaction reasoning:
— The combined offering will be one of the most comprehensive HCM portfolios in the industry, enabling Paychex to meet better the needs of new and existing customers across all customer segments
— Paycor’s strength upmarket will complement Paychex’s positioning in this customer segment
— The acquisition expands Paychex’s sales coverage and adds additional growth platforms via access to Paycor’s strategic partnerships and embedded HCM capabilities
— A shared emphasis on helping businesses succeed through leading technology and advisory solutions and commitment to investing in product innovation and using data and AI to provide actionable insights to customers
— An expected run-rate cost synergies of over $80 million in the near term and substantial revenue synergy opportunity over the next several years
Pride Aggregator, an affiliate of Apax Partners, currently owns 96.1 million of Paycor’s shares, representing most of Paycor’s outstanding common stock. And Pride Aggregator, LP has approved the transaction by written consent
J.P. Morgan Securities is serving as Paychex’s exclusive financial advisor, and Davis Polk & Wardwell is serving as Paychex’s legal advisor. And Goldman Sachs is serving as the exclusive financial advisor to Paycor, and Kirkland & Ellis is serving as legal advisor to Paycor.
KEY QUOTES:
“I’m excited to welcome Paycor to the Paychex family. For over 50 years, Paychex has been committed to helping businesses succeed. This acquisition represents a significant milestone in our journey to provide best-in-class HCM solutions to businesses of all sizes.”
“The acquisition of Paycor is highly complementary. It will enhance our capabilities upmarket, broaden our suite of AI-driven HR technology capabilities, and provide new channels for sustained long-term growth. Our customers will benefit from an expanded suite of technology and advisory solutions designed to help them address their HR challenges, and Paycor’s customers will benefit from our broad product set of HR advisory and employee solutions and from the scale and tradition of operational and service excellence that Paychex is well-known for in the marketplace.”
– John Gibson, President and CEO of Paychex
“Paycor’s mission is to empower business leaders to achieve greater success. We believe this transaction will create a great outcome for our clients and key stakeholders, and we are very excited to be joining Paychex for the next phase of our journey. We are confident that our customers will benefit from the shared expertise, resources, and innovative HCM solutions of both companies to drive even greater people and business performance.”
– Raul Villar, Jr., CEO of Paycor
