Public company Ultimate Software is acquiring French startup PeopleDoc for $300 million in cash and stock. The transaction is expected to close in the third quarter of 2018. These two companies both make HR solutions.
Ultimate Software has been around for a while. It went public in 1998 and switched to a software-as-a-service solution in 2002 — this solution is called UltiPro. It lets you manage all things HR, from payroll to benefits, time management, onboarding, performance management and more.
PeopleDoc is a younger French startup that has raised over $50 million. As the name suggests, PeopleDoc lets you centralized all HR documents related to you in a single location. They can come from multiple sources and systems, they’ll all be there.
The startup has also worked on an onboarding solution and other tools to automate HR processes as much as possible. For instance, you can use PeopleDoc to communicate with the HR team and notify them of a change.
Ultimate Software has around 4,100 customers, which represent around 38 million employees. So it’s clear that the company is going after big clients. Each customer employs 9,200 people on average.
PeopleDoc has a thousand customers and serves 4 million employees. While PeopleDoc is significantly smaller than Ultimate Software, it’s a notable acquisition for the startup.
Ultimate Software says that it plans to spend $75 million in cash when the acquisition closes. PeopleDoc shareholders will receive another $50 million a year later.
Finally, Ultimate Software is spending around $175 million in stock for the rest of the acquisition. The company has been doing incredibly well on the stock market, consistently going up over the past ten years.
There are two reasons behind the acquisition. First, Ultimate Software has been mostly focused on American customers. With today’s acquisition, Ultimate Software will be able to convince new international customers, particularly in Europe.
Second, PeopleDoc will continue to operate as a subsidiary as these two companies don’t exactly do the same thing. In fact, Ultimate Software will start distributing PeopleDoc’s services to its own customers next year.