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Merger of Kronos and Ultimate Software – A Strategic Joining of Forces

Hellman & Friedman LLC (H&F), the controlling shareholder of both Kronos Incorporated and Ultimate Software, will merge the two entities, creating a human capital management (HCM) powerhouse valued at $22 billion. The merger will create one of the world’s largest HCM cloud companies by combining the strength of the two organizations – Ultimate’s UltiPro HCM and Employee Experience products with Kronos’ Workforce Dimensions and Workforce Ready.

Both Kronos and Ultimate have strong, growing portfolios. Kronos reported revenue of $1.4 billion for fiscal 2019, and Ultimate reported $1.14 billion for fiscal 2018. In a 2019 statement regarding Ultimate’s acquisition by H&F, Ultimate’s CEO Adam Rogers discussed the purchase as a win-win, with Ultimate looking for a cash injection and H&F looking for well-run, growing businesses to add to their portfolio.

Kronos has been very active in disrupting the HCM marketplace. In 2014, CEO Aron Ain recognized that to keep Kronos relevant and competitive, the company needed a vision to “produce a product that would put Kronos out of business.” The resulting project (code-named Falcon) took a fresh approach to the HCM market and created Workforce Dimensions, a revolutionary cloud-based HCM solution powered on the D5 platform.

Source: Human Capital Management at SoftwareReviews, Report Published January 2020

Our Take

Ultimate’s and Kronos’ innovative product offerings are advancing HCM technology, enabling organizations to use human capital management solutions not just as an administrative function but as a driver of value within the organization.

The two companies are well aligned through not only product portfolio but also corporate culture. This approach is refreshing and very indicative that the organizations are not just talking the talk but truly believe in building innovative solutions to help organizations around the world drive better business outcomes, achieve a competitive advantage, and create engaged workforces.

Alone, both organizations are successes in the HCM marketplace. Combined, they have the potential to rival the world’s largest HCM solution providers.

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