martinwolf Analysis:

• Ceridian Corporation, a provider of human resource, workforce management, payroll, and benefits administration solutions, announced this week it would acquire Dayforce Incorporated, a workforce management solutions company. The transaction is expected to close in March, and the details of the transaction were not disclosed.
• This acquisition expands Ceridian's offerings from the core HRMS area, where Ceridian is strong, to also include workforce management.  
• This is a technology play to become a one-stop shop. Last year Ceridian jointly invested in major expansion of the InView™ solution that brought payroll, HR, self-service, benefits, and workforce management onto a single platform, which was supported by Dayforce's technology.

Recent acquisitions: 

• Ceridian has already demonstrated it is an active acquirer. Last June it bought Versult Group, Inc., a leading workforce management consulting firm. Additionally, Ceridian had already made an investment in Dayforce's HCM platform in February of last year and had an option to buy built-in. Further, Most of Dayforce's customers were largely coming from Ceridian.

Recent Transactions in the Space: 

• The consolidation train for solutions for mid-market has left the station. The mid-market acceptance of HCM software solutions is occurring very rapidly. Software and tech-enabled services companies in the core HRMS, benefits administration, and payroll services need to decide whether they are a buyer or seller. Business success around a point solution in the core HRMS/workforce management space will become increasingly challenging.

Expectations for the Space: 

• Core HRMS players are aggressively pursuing workforce management components, such as Paychex, Inc., which recently acquired Icon Times Systems, Inc. in January of this year. We expect more such deals to follow.
• Here at martinwolf, we expect consolidation across the three pillars of HCM space - core HRMS(payroll and benefits administration), workforce management, and talent management - which was key trend from Q4 2011. For example, ADP acquired Asparity Decisions Solutions, Inc., a
  healthcare/benefits administration software provider, September 2011, The RightThing, Inc., a recruitment outsourcer, in October 2011, and this past January they picked up Ma Foi Consulting Solutions Ltd., an India-based payroll services provider.
• SAP's acquisition of SuccessFactors (NYSE: SFSF) in December 2011 was the gauntlet. SAP, along with Oracle and Infor, have been very strong in core HRMS. By acquiring SFSF, the filled the void they had in the talent management space. 
• Also, this is important for SaaS, software, and IT-enabled BPO companies serving the mid-market. Many other similar events and predictions are covered in our forthcoming report on mid-market M&A trends in HCM. Our analysis predicts that companies will start providing services across the entire spectrum of HCM, to become one-stop shops. Over the next 12 months, the mid-market is biggest untapped opportunity for M&A and consolidation.
• Mid-market customers will be getting broader offerings. Companies operating in the space should decide if they are a buyer or a seller. Private equity firms with investments in HCM space should evaluate the market for an exit.  
• Debt financing is cheap, and with Facebook's IPO pending, equity markets are expected to open up. This means access to cash and a low cost of capital. Risks associated with Greece's market uncertainty have been priced in. Today it is, and over next few quarters it will remain, a seller's market. 
• On the talent management side, the growth is significant, but the feature functionality set available in the marketplace for mid-market companies is not quite there yet.
• For companies addressing the needs of mid-market customers, we are not seeing signs of crossover yet between SaaS companies offering talent management, a strategic role of HR, to core HRMS, the admin role of HR. First mover for that space will get the advantage.

Please click here to read the press release.

To learn more about this transaction or our firm, contact Tim Mueller tmueller@martinwolf.com . 

About martinwolf    

Based in Silicon Valley, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 100 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf | M&A Advisors. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   

September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf | M&A Advisors represented SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments.  

Please click here to view the announcement. 

September 20, 2011  

Accel-KKR, a technology-focused private equity investment firm, announced that it had taken a majority stake in Infinisource. Infinisource is a leading benefits administration technology and services company. martinwolf | M&A Advisors represented the seller in this transaction.  

Please click here to read more.    

© martinwolf | M&A Advisors 2012    

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