Ultimate Software Sells for $11 Billion

Ultimate Software Sells for $11 Billion

An investor group led by private-equity firm Hellman & Friedman has reached a deal to buy Ultimate Software Group Inc. for about $11 billion and take the public company private. The Hellman & Friedman-led group agreed to pay $331.50 a share in cash. The deal offers a 19% premium to the company’s Friday closing price.

The deal is expected to close in mid-2019. The Weston, Florida-based company employs more than 5,000 folks and the deal will likely make millionaires out of many of the longer-term employees. Following the announcement, Ultimate Software’s stock soared nearly 20 percent on Monday, closing at $332.54, up $54.71 in Nasdaq trading. Ultimate Software also announced Monday that it had 2018 sales of $1.14 billion, up 21 percent from 2017. Net income was $65.1 million compared with $14 million for the year earlier.

In a release, CEO Scott Scherr said, “Today’s announcement will allow us to make additional, prudent investments in our products and services to better serve our customers. Hellman & Friedman is in full alignment with our vision to serve the global HR market.”

Nandan Amladi, an analyst at Guggenheim Securities, says the deal isn’t a surprise, saying “While the bulls had argued that the stock deserved a premium for its steady growth, consistent execution and strong market position, we had seen competition, particularly on the product front, catch up, notably from Ceridian (CDAY) in the midmarket and Workday (WDAY) at the higher end of the market.” For the sake of Ultimate’s current employees, I hope the next 12 months are more pleasant for your than it has been for CareerBuilder, who was also acquired by a private equity firm.