Ultimate Software Group, a cloud-based human resources applications developer, said on Monday it agreed to be bought by an investor group led by private equity firm Hellman & Friedman for about $11 billion.
PE firms are offering $331.50 per share in cash — at a premium of 19 percent to the HR software provider’s closing share price on Friday, Reuters reported.
The investor group includes Blackstone Group, GIC, Canada Pension Plan Investment Board (CPPIB) and JMI Equity.
HR software makers are benefiting from the growing tendency among enterprises to shift to cloud-based applications in a move to manage their payroll and human resources.
Ultimate Software competes with rivals including Workday, Automatic Data Processing and Oracle to sell software to companies to help manage their employees.
The size of the industry, known as cloud human capital management, is expected to touch $22.17 billion in 2023 from $13 billion in 2016, according to a report by Allied Market Research.
Workday last year bought smaller Adaptive Insights for about $1.55 billion in one of the few big deals among the HR software makers recently.
The last big deal in the HR software sector was in 2011 when SAP bought human resources company SuccessFactors for $3.4 billion.
Hellman & Friedman had earlier taken human resources management software maker Kronos private in 2007 for $1.8 billion. Blackstone also owns benefits and HR platform Alight Solutions.
Ultimate Software, which generated more than $1.1 billion in 2018 revenue, expects the deal to close in mid-2019. The company can also consider alternative offers in a 50-day “go-shop” period.
Ultimate Software CEO Scott Scherr will manage the company upon completion of the software deal.