Kronos Incorporated, a leading provider of human capital management solutions, has announced it has signed a definitive agreement to be acquired by the private equity firm Hellman & Friedman Capital Partners VI, L.P. and its related funds in a transaction valued at approximately $1.8 billion. Under the terms of the agreement, Kronos shareholders will receive $55 in cash for each share of Kronos common stock, representing a 34.4 percent premium over Kronos' closing share price from 20 trading days ago.
Hellman & Friedman LLC is a leading private equity investment firm with offices in San Francisco, New York, and London and is currently investing its sixth fund, which has over $8 billion of committed capital. Investing alongside lead investor Hellman & Friedman will be JMI Equity, a private equity firm focused exclusively on the software and business services industries. "We are pleased to announce this agreement, which represents the culmination of a thorough review of our standalone plan and strategic alternatives," said Mark S. Ain, executive chairman of the Kronos Board of Directors. "Our board of directors believes this transaction is in the best interests of our shareholders and affirms Kronos' tremendous value, market-leadership, and the exciting growth opportunities in front of us."
"Hellman & Friedman will be a great partner for Kronos. They have tremendous capital resources, significant expertise in software and technology, and a proven track record of building leading global companies. Importantly, Hellman & Friedman shares our commitment to accelerate our global and talent management expansion initiatives as we work together to achieve our goal of becoming the first billion dollar company exclusively focused on human capital management," said Kronos Chief Executive Officer Aron Ain. "Kronos remains deeply committed to the markets we serve, and we now expect to have even greater flexibility to invest in our customers, technology, and people."
"We believe Kronos is a uniquely positioned global software and services company," said David Tunnell, managing director of Hellman & Friedman LLC. "It has a strong franchise with leading positions in large and growing markets and a world-class management team. We look forward to working with Kronos to serve its current and future customers and to achieve its long-term business goals."
Kronos' board of directors has approved the merger agreement and has resolved to recommend that shareholders adopt the agreement. Pending the receipt of shareholder approval and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other required regulatory approvals, as well as satisfaction of other customary closing conditions, the transaction is expected to be completed in the fourth quarter of fiscal 2007. The transaction will be financed through a combination of debt and equity financing and cash, cash equivalents, and short-term investments of Kronos. There is no financing condition to the obligations of the equity sponsors to consummate the transaction.
Jefferies Broadview, a division of Jefferies and Co., is acting as exclusive financial advisor to the special committee of the Kronos board of directors and provided a fairness opinion to the board. WilmerHale is acting as legal advisor for Kronos, and Simpson Thacher & Bartlett LLP is acting as legal advisor to Hellman & Friedman.
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