Ultimate Software Group, the seller of UltiPro software has agreed to be acquired by a group of investors led by Hellman & Friedman Capital Partners for $11 billion. As part of the acquisition deal, the Ultimate Software shareholders will get $331.50 per share cash which is a 32% premium over the average stock price of the company during one month period leading up to 1 Feb 2019. The shares of the company rose by over 20 percent in NY trading.
Ultimate Software Group which makes a human capital management software based in cloud was founded by the company’s current CEO and President Mr. Scott Scherr who will continue to be part of the senior management team even after the acquisition deal. The software offered by the company provides HR management services as part of basic package which includes managing benefits and payroll of employees as well as offers analytics tools for tracking all human resources on a subscription per employee basis. Its notable customers include Red Roof Inns and Subway Restaurants and Yamaha Corp.
The Company based in Weston, Florida, has been ranked by Fortune Magazine as Number 1 in the Best Technology Workplaces list for four consecutive years. Human resource management and payroll software is an attractive investment space as it has high customer retention rates along with huge demand from companies for managing their payroll. The company’s stock has attracted attention from analysts recently as a Deutsche Bank analyst Michael Turrin called it a top value pick.
Ultimate Software Group was one of the first human resource management software which moved to cloud to offer its services. The early transition has enabled it tap into the growing demand for cloud based HR services. The company’s strong workforce culture along with a proven and consistent record of 20% plus recurring revenue growth has made it a top choice for investors.
The deal with Hellman & Friedman will help the company to make investments for expanding its product and service offerings along with rewarding its current employees. The Ultimate Software is the second largest and fastest growing HR services provider, behind its chief competitor Workday Inc. The company has a huge market share in the $17 billion HR management and payroll software market. The company recent acquisition of PeopleDoc has brought new prospects for international expansion as the company has moved beyond its core base of mid-sized customers.