Paychex moves closer to Paycor acquisition as regulatory period ends

ROCHESTER, N.Y. - Paychex, Inc. (NASDAQ:PAYX), a leader in human capital management solutions, has announced the expiration of the Hart-Scott-Rodino (HSR) waiting period, a significant step towards its acquisition of Paycor HCM , Inc. (NASDAQ:PYCR). This development satisfies one of the key conditions for finalizing the transaction, which is expected to close within the first half of this year. According to InvestingPro data, Paycor currently maintains a market capitalization of $4 billion and has demonstrated impressive revenue growth of 15.7% over the last twelve months.

The HSR waiting period is a mandatory antitrust review for large transactions that could potentially affect market competition. Its conclusion without any government objections suggests that there are no antitrust concerns significant enough to impede the acquisition process.

Paychex, which serves over 745,000 customers across the United States and Europe, is poised to enhance its service offerings through this acquisition. Paycor, known for its payroll and talent software, will complement Paychex’s suite of services, which includes human resources, employee benefit solutions, insurance, and payroll. InvestingPro analysis reveals Paycor’s strong operational efficiency with gross profit margins of 66%, positioning it well in the competitive HCM market. The company maintains a healthy balance sheet with more cash than debt, one of several key insights available in InvestingPro’s comprehensive research reports.

Completion of the deal remains subject to other customary closing conditions. The acquisition is part of Paychex’s strategy to expand its product portfolio and strengthen its position in the human capital management market.

This news comes amidst Paychex’s efforts to provide comprehensive technology and advisory services in a sector that is increasingly reliant on digital solutions. The company’s commitment to helping businesses succeed is reflected in its extensive client base, paying one out of every 12 American private sector employees.

Investors and stakeholders are advised to consider that this communication contains forward-looking statements, which are based on current beliefs and expectations about future events. These statements are subject to risks, uncertainties, and changes in circumstances that may cause actual results to differ materially from those expressed or implied by such statements. While Paycor has shown strong market performance with a 52% price return over the past six months, InvestingPro analysts project the company will achieve profitability this year, marking a significant milestone in its growth trajectory. Discover more detailed financial analysis and 10+ additional ProTips for Paycor with an InvestingPro subscription.

The information regarding the acquisition is based on a press release statement and further details about the proposed transaction can be found in Paycor’s definitive information statement sent to its stockholders.

In other recent news, Paycor HCM, Inc. reported second-quarter fiscal 2025 earnings that surpassed analyst expectations, with revenue rising 13% year-over-year. The company posted adjusted earnings per share of $0.14, beating the analyst estimate of $0.12, and reported revenue of $180.4 million, exceeding the consensus estimate of $177.17 million. Paycor’s recurring revenues increased 14% year-over-year to $167.4 million, while adjusted operating income saw a 36% year-over-year increase to $31.8 million. Additionally, Paycor announced a definitive agreement to be acquired by Paychex, Inc. in an all-cash transaction valued at approximately $4.1 billion, or $22.50 per share, with the merger expected to close in the first half of 2025. Baird analysts downgraded Paycor’s stock rating from Outperform to Neutral, lowering the price target to $22.50 from $28.00, after reviewing the company’s fiscal second-quarter results and 14C filing. The analysts concluded that it is unlikely for new shareholder actions to develop, leading to the revised rating and price target. Paycor has suspended its financial guidance for fiscal year 2025 due to the pending acquisition, shifting investor focus from quarterly results to the upcoming merger.

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