Kronos Inc. and Ultimate Software are merging, the two firms announced today. Both are owned by Hellman & Friedman LLC, a private equity firm that paid $11 billion for Ultimate Software in 2019.
The Kronos-Ultimate Software combination creates a firm with revenues of $3 billion and more than 12,000 employees worldwide.
But there are a lot of questions ahead, beginning with the name of the combined firms. That was not revealed today.
"We hope to announce a new company name soon," a spokeswoman at Ultimate Software said.
For now the Kronos-Ultimate Software merger brings together two firms that have some overlapping HR systems, but also different strengths.
Kronos began as a maker of time clocks and workforce management systems; it is now a full-service HR systems provider. The firm said about half of the Fortune 1000 firms use Kronos systems.
Kronos workforce systems gave that firm a large market share, which will help Ultimate, said Trevor White, an analyst at Nucleus Research.
Aron Ain, CEO at Kronos, will be CEO and chairman of the combined firms.
The Kronos-Ultimate Software merger "provides a very easy way for Ultimate to expand their market," White said. Ultimate is known for its UltiPro HR system, which includes payroll, talent, time and labor management, as well as AI capabilities.
There are a lot of questions ahead for customers, White said. Both firms provide full HCM suites, such as talent acquisitions systems. He wondered if customers would be gradually moved to one platform.
It won't make sense for the newly combined Kronos-Ultimate Software to continue research and development on similar product lines, White said. He believes that Ultimate has the stronger HCM product line.
Trevor WhiteAnalyst, Nucleus Research
"It will be interesting to see how they position it: Do they get rid of the Kronos name? Do they get rid of the Ultimate brand?" White said.
The Kronos-Ultimate Software announcement doesn't go into the details about the future of the respective product lines. But the announcement does say that "the new company will bring together the best of each company's award-winning solutions," including Ultimate's UltiPro HCM and employee experience products with Workforce Dimensions from Kronos and Kronos Workforce Ready.
How the merger will impact employees remains to be seen, but the announcement said there are "plans for growth, including the addition of 3,000 employees over the next three years." The firms will maintain their headquarter offices. Kronos is based in Lowell, Mass., and Ultimate in Weston, Fla.