Kronimate? Ultinos? A Merger of Equals.
Last Thursday, a major merger in the HCM world was announced between Kronos and Ultimate Software. In some ways, the merger was not a surprise. In March 2007, Kronos was taken private by the equity firm Hellman & Friedman, and in March 2019, Hellman & Friedman took Ultimate Software private. I was one of many observers who wondered if the two organizations would find themselves coming together. Now that they have merged, I have a few thoughts on what may make this a winning combination—beyond my fictitious combined names, that is. (The new branding will be announced later.)
They stick to their knitting. If you’re not familiar with Kronos and Ultimate, their offerings are almost entirely complementary, with little overlap in their flagship products. I have long praised Kronos for “sticking to its knitting” of world-class workforce management with its Workforce Ready product and innovative Workforce Dimensions platform, and staying out of full-on Core HR and Talent Management (for the most part). And the same goes for Ultimate, which has stuck to its products around world-class Core HCM and Payroll product UltiPro HCM (for the most part). With annual revenues of approximately $1.5B for each firm, and over 20,000 customers across both, there’s obviously a huge opportunity for cross-sell before they even look to new customers. With great offerings serving both enterprise and mid-market organizations, the combined company has the potential ability to serve a huge and growing market.
Obsession with culture. Kronos and Ultimate pride themselves on their long-serving employees, and have been recognized by local and global publications as Best Places to work, both appearing on the most recent “Forbes 100 Best Places to Work,” “Glassdoor Best Places to Work,” and the Great Places to Work Institute’s “Best Workplaces in Tech” Lists. Aron Ain, the former CEO of Kronos, will be the CEO of the combined company. His recently-published book, WorkInspired, shared his philosophy on building a great workplace. In any merger there are always huge cultural challenges, but Ain and the leadership at Ultimate and Kronos have a strong understanding of and commitment to getting the culture right, so their business will thrive.
Growth through innovation is paramount. Both companies have invested in innovation, with AI and analytics at the forefront. Current plans keep the focus on growth and innovation in the areas of expertise that both companies bring to the new organization. And the plan is to grow—in revenue, employees and customers—to support continued innovation and investment in their products.
I have followed both of these companies for many years, and in a few weeks I’ll have a chance to learn more firsthand at the Ultimate Connections conference, where all the combined leadership will be in attendance. So, watch this space.
You can find my my take on the 2019 Ultimate Connections conference here: https://www.mollielombardi.com/post/ultimate-software-connecting-to-the-future