CINCINNATI — Cincinnati-based software company Paycor is being acquired by a Rochester, New York-based company called Paychex, according to an announcement from Paychex.
Paychex — like Paycor — is a human capital management company that provides technology and software services for businesses. Paycor specifically specializes in payroll and talent software — and is the current naming rights sponsor of Paycor Stadium, home of the Cincinnati Bengals.
According to the announcement from Paychex Tuesday morning, Paychex is set to acquire Paycor in an all-cash transaction valuing roughly $4.1 billion. The agreement has already been approved by the boards of directors of both companies, the announcement said.
"We believe this transaction will create a great outcome for our clients and key stakeholders, and we are very excited to be joining Paychex for the next phase of our journey," said Raul Villar Jr., CEO of Paycor, in a press release. "We are confident that our customers will benefit from the shared expertise, resources and innovative HCM solutions of both companies to drive even greater people and business performance."
In a conference call with Wall Street analysts Tuesday, Paychex officials told investors to expect $80 million in cost savings from the merger of both companies. They offered no details on whether jobs will be lost from those cost savings, but stressed the deal should lead to overall job growth.
“This is really a growth play,” said Paychex CEO John Gibson. “It’s really about growing their client base without having to add the same cost per client that they historically have …. As we grow, that that creates opportunities for employees to be able to grow their careers.”
Founded in 1990, Paycor is headquartered in Cincinnati and recently moved those headquarters into the downtown area.
According to a May 2024 announcement from 3CDC, Paycor made plans to move out of its 136,000-square-foot campus in Norwood and into the former Saks Fifth Avenue building, which 3CDC bought from the City of Cincinnati for just $1.
When 3CDC announced Paycor's new home base, the Cincinnati real estate development non-profit said Paycor would operate as "an anchor office tenant for the space" at 101 West Fifth Street.
Joe Rudemiller, a spokesperson for 3CDC, said Tuesday morning that he couldn't comment on the acquisition, but said Paycor's plan to move into the former Saks Fifth Avenue building was expected to bring about 150 employees per day to the building by this summer.
The space was intended to be used for training and presentation, with offices available for employees who work remotely.
Paycor employs roughly 2,900 employees and serves over 49,000 clients, according to the acquisition announcement from Paychex.
Paycor is well known in Cincinnati because its founder, Bob Coughlin, also started the Flying Pig Marathon.
The Cincinnati-based business was sold in 2018 to Apax Partners, a British private equity firm. From there, Paycor went public in 2021 through an Initial Public Offering (IPO) that raised $450 million to fund new growth initiatives.
According to Paychex's announcement, the company will execute an all-cash acquisition of Paycor for $22.50 per share, or a total of around $4.1 billion. The announcement says the acquisition is expected to close in the first half of 2025, though it didn't highlight any specific dates.
Paycor is also the company with current naming rights on the formerly-named Paul Brown Stadium.
The naming rights deal forged between Paycor and the Cincinnati Bengals was never made public, but Paycor revealed in an SEC filing last year that it agreed to pay $66.7 million through 2038.
Whether Paychex will honor those terms will depend on contract terms, said Rich Brand, head of the Sports Group at the Arent Fox Schiff law firm.
"I would think that it stays in place," Brand said. "I would think they either change the name to the successor or the successor determines, you know what, Paycor has a very big name here and it will continue to have a very big name here. I’m good with the name Paycor Stadium."
The Cincinnati Bengals did not respond to questions about the naming rights deal.
Executives from Paycor and Paychex did not address the naming-rights deal in a conference call with Wall Street analysts.
But they did tell investors to expect $80 million in annual cost savings from the merger of both companies. They didn't say where and how many jobs will be eliminated.
“This is really a growth play,” said Paychex CEO John Gibson. “It’s really about growing their client base without having to add the same cost per client that they historically have …. As we grow, that that creates opportunities for employees to be able to grow their careers.”
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