Hellman & Friedman led group agrees $11bn Ultimate Software deal


Financier Worldwide Magazine

April 2019 Issue

In an $11bn deal which takes the company private, human capital management (HCM) solutions in the cloud provider Ultimate Software is to be acquired by an investor group led by private equity firm Hellman & Friedman.

Under the terms of the definitive agreement, all Ultimate Software stockholders of record will receive $331.50 in cash for each share of the company’s common stock held upon the closing of the transaction. The board of Ultimate Software has unanimously approved this transaction and recommended that stockholders vote in favour of the transaction.

For almost 29 years, Ultimate Software has focused exclusively on helping businesses improve the experience of their employees through leading HR and payroll solutions, and in recent years, through a comprehensive HCM suite. At the end of 2018, the company’s total revenues exceeded $1.1bn and the company currently serves more than 5600 companies worldwide, with more than 48 million people records in the cloud.

“The transaction provides our stockholders with a substantial premium,” said Scott Scherr, chief executive, president and founder of Ultimate Software. “This change will bring meaningful benefits to our employees and customers – both in the long and short terms. Since all of our employees are given equity when they join us, as stockholders, this transaction will result in immediate financial upside for them. It will also allow us to make additional, prudent investments in our products and services.”

Upon completion of the transaction, Ultimate Software will continue to operate under the leadership of Mr Scherr and the existing senior management team. The privately held company will be owned by an investor group led by Hellman & Friedman in partnership with Blackstone, GIC and Canada Pension Plan Investment Board (CPPIB), as well as other investors, including JMI Equity.

“Ultimate Software’s market leadership in the human capital management segment, and the company’s impressive track record of growth, are built on the outstanding quality of its software and its dynamic and motivated employees,” said David Tunnell, a partner at Hellman & Friedman. “The company deeply understands the essence of HCM, having itself been recognised with numerous best workplace awards from leading publications for its exceptional mission-driven culture. We look forward to building on Ultimate’s successes, working along with our investment partners.”

Martin Brand, senior managing director at Blackstone, added: “We are excited to partner with Ultimate Software and this investor group to support the strong growth and culture of this exceptional company.”

Acting as exclusive legal adviser to Ultimate Software is Goldman Sachs & Co. LLC, with Stroock & Stroock & Lavan LLP providing legal counsel. Financial adviser to the investment group is Qatalyst Partners. Serving as legal counsel to Hellman & Freidman is Simpson Thacher & Bartlett.

The transaction – which includes a 50-day ‘go-shop’ period which permits Ultimate Software’s board of directors and financial adviser to actively initiate, solicit and encourage alternative acquisition proposals – is expected to close in mid-2019, subject to stockholder approval and other customary closing conditions, including regulatory approvals.

“Our customers will benefit from our ability to bring new features and services to market more quickly, while still enjoying the same high level of service they have with Ultimate today, or better, with new innovations to our offerings,” concludes Mr Scherr. “Hellman & Friedman is in full alignment with our vision to serve the global HR market, while preserving our unique company culture and mission.”

© Financier Worldwide


Fraser Tennant

©2001-2019 Financier Worldwide Ltd. All rights reserved.