Paychex Acquires Paycor for $4.1 Billion, Expands Market Reach

Paychex, a leading payroll and HR technology company, has acquired Cincinnati-based competitor Paycor for $4.1 billion, significantly expanding its market presence. The merger is anticipated to generate $80 million in near-term cost savings, although the company has not confirmed if layoffs will occur. Paycor will continue to operate as a business unit within Paychex, with some leadership continuity from its previous executives and a commitment to expand in Cincinnati. Paychex has demonstrated steady financial performance, with consistent earnings growth of 8.6% annually over three years and a 4.4% revenue increase to $5.4 billion in the most recent year, alongside stable EBIT margins. Despite these positive fundamentals, recent trading sessions have seen Paychex shares decline, reflecting broader market volatility. The company has also maintained a neutral stance on share buybacks, with a 3-year buyback ratio of 0.00%.