Paychex to acquire Paycor HCM for $22.50 per share in cash

Paychex (PAYX) announced it has entered into a definitive agreement to acquire Paycor HCM (PYCR) in an all-cash transaction for $22.50 per share, representing an enterprise value of approximately $4.1B. The definitive agreement has been unanimously approved by the boards of directors of both companies. There are expected run-rate cost synergies in excess of $80M in the near-term and substantial revenue synergy opportunity over the next several years. The transaction is 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 beyond. The 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. Paychex is committed to maintaining its dividend policy and balance sheet and has obtained committed financing to support the transaction, which is expected to be funded with incremental debt. The 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, an affiliate of Apax Partners, currently owns 96.1M of Paycor’s shares, representing a majority of Paycor’s outstanding common stock. Pride Aggregator has approved the transaction by written consent.