Payroll and HR services giant Paychex has agreed to buy Charlotte, North Carolina-based HR Outsourcing Holdings Inc., a national professional employer organization, for an undisclosed sum.
The acquisition, announced Monday, aims to help Paychex with professional employer organization growth as well as expand its HR services offerings.
HROI, founded in 2001, provides HR strategies to small and mid-sized businesses in more than 35 states. This is the eighth acquisition since president and CEO Martin Mucci assumed the role in September 2010.
“This acquisition represents Paychex’s continued focus on growth — both in revenue and in PEO solutions for our clients,” Mucci says. “The combination of Paychex’s experience, knowledge and resources with the experience and fast-paced growth of HROI positions us to have an even stronger presence in the industry.”
Under the terms of the deal, about 140 of HROI’s employees, including those in leadership, will be offered a position with Paychex, says Laura Saxby Lynch, director of corporate communications. She says that she doesn’t anticipate a shift in company culture once HROI employees shift into their new roles.
Notably, HROI president and COO Anthony Danon will join Paychex’s leadership team in a role that will be finalized in the coming weeks as Paychex executes its integration plan, Lynch says.
The Rochester, New York-based company began having conversations with HROI several months earlier, and culture fit was a point of interest, says John Gibson, senior vice president of service at Paychex.
“We have been focusing quite a bit on how to grow our HR outsourcing as a company, and the acceleration of our PEO has been part of our strategy,” he says. “These things are long processes. I wanted to make sure it was a good cultural fit. [HROI] built a strong team of PEO experts and were doing it the right way. A lot of these things are just chemistry.”
Paychex serves more than one million worksite employees across its HR product suite. The company has a market cap of less than $20 billion and was trading at $55.60 Monday afternoon, down from $60.38 at closing last year.
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