Paychex Enters into Definitive Agreement to Acquire Paycor

Creates one of the most comprehensive suites of human capital management (HCM) solutions in the industry for organizations of all sizes Paychex, Inc. (“Paychex”), an industry-leading human capital management (HCM) company delivering a full suite of technology and advisory solutions in human resources, employee benefit solutions, insurance, and payroll announced it has entered into a definitive agreement to acquire Paycor HCM, Inc. (“Paycor”), a leading provider of HCM, payroll and talent software in an all-cash transaction for $22.50 per share, representing an enterprise value of approximately $4.1 billion. The definitive agreement has been unanimously approved by the Boards of Directors of both companies.

“I’m excited to welcome Paycor to the Paychex family”

Headquartered in Cincinnati, Ohio, Paycor has approximately 2,900 employees, serves over 49,000 clients, and supports approximately 2.7 million employees across the United States. Paycor’s leading HCM, payroll, and talent platform was designed to serve organizations of all sizes, from ten to thousands of employees. Paycor has expanded its upmarket position since becoming a public company in 2021 by consistently investing in data, AI, and other cutting-edge technologies. HR Tech Insights: Paychex Introduces HR Analytics Premium Plus Solution with Built-in GenAI Capabilities “I’m excited to welcome Paycor to the Paychex family,” said John Gibson, President and CEO of Paychex. “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.” Gibson added: “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.” “Paycor’s mission is to empower business leaders to achieve greater success,” said Raul Villar, Jr., CEO of Paycor. “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.” HR Tech Insights: Paychex: Over 75% of HR leaders will use AI in the upcoming year Overview of Transaction Rationale

• Combined offering will be one of the most comprehensive HCM portfolios in the industry, allowing Paychex to better meet the needs of new and existing customers across all customer segments
• Paycor’s strength upmarket will complement Paychex’s position in this customer segment
• Acquisition significantly expands Paychex’s sales coverage and adds additional growth platforms via access to Paycor’s strategic partnerships and embedded HCM capabilities
• 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
• Expected run-rate cost synergies in excess of $80 million in the near-term and substantial revenue synergy opportunity over the next several years
• Expected to be neutral to slightly accretive to adjusted diluted EPS in the first fiscal year post-close and accretive in the second fiscal year and beyond²

Transaction Details

• All-cash acquisition of 100% of Paycor for $22.50 per share, reflecting approximately $4.1 billion enterprise value
• Represents a premium of approximately 19% over Paycor's 30-day volume weighted average trading price as of the unaffected trading date of January 3, 2025
• Paychex is committed to maintaining our dividend policy and strong balance sheet and has obtained committed financing to support the transaction, which is expected to be funded with incremental debt
• Acquisition is expected to close in the first half of calendar 2025, subject to satisfaction of regulatory approvals and other customary closing conditions
• Pride Aggregator, LP, an affiliate of Apax Partners LLP, currently owns 96.1 million of Paycor’s shares, representing a majority of Paycor’s outstanding common stock. Pride Aggregator, LP has approved the transaction by written consent

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Source – businesswire