Big news in the world of HCM technology. Today Kronos and Ultimate announced an agreement to merge. Not a big surprise, given that they were both in the portfolio of H&F private equity.
Both Kronos and Ultimate have roots in the SMB and have been moving “upmarket,” competing in the large enterprise segment with the likes of Workday, SAP, and Oracle. While Ultimate is known for more core HRIS and HCM, Kronos brings a strong workforce management offering to the combined firm, having emerged from the time and attendance market. Both firms have complimentary cultures and have a strong brand affinity with their customers. Both are also viewed as innovators in their respective focus areas (market segment and tech).
Highlights from the announcement:
- 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.