Kronos and Ultimate Software Enter Definitive Merger Agreement Creating Company Valued at $22 Billion
Merger brings together world-renowned best places to work, with plans to add 3,000 employees over three years
Date: February 20, 2020 11:18 AM EDT
Kronos Incorporated and Ultimate Software today announced that they have entered into a definitive merger agreement to form one of the world’s largest cloud companies. By bringing together two industry leaders, the transaction 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. The combined company will have enhanced scale and an even stronger position in the fast-growing HCM marketplace.
• Kronos and Ultimate each have a proven track record of delivering the industry’s most innovative solutions to help organizations around the world drive better business outcomes, achieve a competitive advantage and create engaged workforces. The new company will bring together the best of each company’s award-winning solutions – Ultimate’s UltiPro HCM and Employee Experience products with Workforce Dimensions from Kronos, Kronos Workforce Ready, and other solutions from Kronos – with an unwavering commitment to delighting customers and exceeding their expectations.
• Combining two exceptional, highly compatible cultures will create a company that is People Inspired. Kronos and Ultimate have been consistently recognized around the world as great places to work – including both being multi-year winners of the prestigious Glassdoor Employees’ Choice Best Places to Work and Fortune 100 Best Companies to Work For® honors. This reflects both companies’ belief that people are at the core of an organization’s success, and that prioritizing the employee experience is the most effective way to help customers succeed.
• Upon closing, 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, longtime Kronos chief executive officer, will be the chief executive officer and Chairman of the combined company – guiding an experienced executive team comprised of leaders from both Ultimate and Kronos.
• The new company will be jointly headquartered in Lowell, Mass. and Weston, Fla., 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. 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.
• Aron Ain, chief executive officer, Kronos
“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.”
• Adam Rogers, chief executive officer, Ultimate
“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.”
• David Tunnell, partner, Hellman & Friedman, lead director, Kronos, and chairman, Ultimate
“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.”
• Martin Brand, senior managing director, Blackstone
“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.”
Transaction Details and Advisors
• The all-stock merger has been unanimously approved by the boards of directors of both companies and is expected to close at the end of March.
• 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.
About Kronos Incorporated
Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos industry-centric workforce applications are purpose-built for businesses, healthcare providers, educational institutions, and government agencies of all sizes. Tens of thousands of organizations — including half of the Fortune 1000® — and more than 40 million people in over 100 countries use Kronos every day. Visit www.kronos.com. Kronos: Workforce Innovation That Works.
About Ultimate Software
Ultimate Software is a leading global provider of cloud human capital management and employee experience solutions, with more than 51 million people records in the cloud. Ultimate’s award-winning UltiPro delivers HR, payroll, talent, and time and labor management, as well as HR service delivery solutions. Founded in 1990, Ultimate is headquartered in Weston, Florida, and employs approximately 6,000 professionals. More information on Ultimate’s products and services can be found at www.ultimatesoftware.com.
About Hellman & Friedman
Hellman & Friedman (H&F) is a preeminent global private equity firm with a distinctive investment approach focused on large-scale equity investments in high-quality growth businesses. H&F seeks to partner with world-class management teams where its deep sector expertise, long-term orientation, and collaborative partnership approach enable companies to flourish. H&F targets outstanding businesses in select sectors including software & technology, financial services, healthcare, retail & consumer, and other business services. Since its founding in 1984, H&F has raised over $50 billion of committed capital, invested in over 90 companies, and is currently investing its ninth fund, with $16.5 billion of committed capital. Learn more about H&F’s defining investment philosophy and approach to sustainable outcomes at www.hf.com.
Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with $571 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.
GIC is a leading global investment firm established in 1981 to manage Singapore’s foreign reserves. As a disciplined long-term value investor, GIC is uniquely positioned for investments across a wide range of asset classes, including equities, fixed income, private equity, real estate and infrastructure. GIC has investments in over 40 countries. Headquartered in Singapore, GIC employs over 1,500 people across 10 offices in key financial cities worldwide. For more information on GIC, please visit www.gic.com.sg or LinkedIn.
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits in the best interests of 20 million contributors and beneficiaries. In order to build diversified portfolios of assets, investments in public equities, private equities, real estate, infrastructure and fixed income instruments are made by CPP Investments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2019, the CPP Fund totalled $420.4 billion. For more information about CPP Investments, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.
About JMI Equity
JMI Equity is a growth equity firm focused on investing in leading software companies. Founded in 1992, JMI has invested in over 145 businesses in its target markets, successfully completed over 95 exits and raised more than $4 billion of committed capital. JMI partners with exceptional management teams to help build their companies into industry leaders. For more information visit jmi.com.
UltiPro is a registered trademark of The Ultimate Software Group, Inc. All other trademarks referenced are the property of their respective owners.
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Darlene Marcroft, Vice President of PR and Communications at Ultimate Software
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