Payroll software provider Ascender is beefing up its portfolio of solutions with the acquisition of human capital management company PeopleStreme, a move that reinforces the private equity-backed outfit’s potential push into the ASX.
Valued at about $190 million, Ascender is already a major player in the local payroll software space and CEO Andrew Wilson says the PeopleStreme buy gives it an edge.
“Today, the HR technology market, estimated to be worth $12 billion, is fragmented, with many different providers offering solutions to meet specific needs,” Mr Wilson said.
“However, with this acquisition, we can now offer a complete solution that brings HR and payroll together to help build a more connected and engaged workforce.”
Ascender already partners with a number of human capital management and workforce management businesses but it has decided to bring PeopleStreme into its fold to better leverage its HR software.
“This acquisition combines the strengths of our two companies to meet the increasing need in the HR and payroll markets,” he said. “While we will continue to work with these partner organisations, the acquisition of PeopleStreme, and the integration of their complete HR suite with our payroll systems, will strengthen our ability to help our customers address changing workforce challenges.”
Workforces across the globe are undergoing significant disruption, with human resources management becoming a core function inside organisations. According to Mr Wilson, the current state of play for most organisations sees them working across several platforms to manage recruitment, payroll, talent management and employee engagement. “This can create a complex environment as not all tools will be able to talk to one another, leading to more hassle and work for HR and payroll teams, instead of less,” he said.
With Ascender eyeing a potential IPO, Mr Wilson said that it was well placed to make an attractive pitch to investors.
“This acquisition certainly positions us better for a possible IPO in the future, which is one option that is being considered,” he said. “However, our immediate focus remains on strengthening our core product and services offering.”
PeopleStreme co-founder and CEO Lyle Potgieter said that the deal was a win for his existing customers, who now get a consolidated payroll-HR solution.
“With Ascender, we see a significant opportunity to offer our customers a unique and powerful integrated all-in-one payroll and HCM solution, this will differentiate PeopleStreme in the market and be advantageous to our customers,” he said.
Following the acquisition, Mr Wilson will continue to lead the joint entity, with Mr Potgieter joining Ascender’s leadership team and continuing to manage the day-to-day operations of PeopleStreme, which will continue to operate under its own brand. Terms of the deal, expected to close on September 28, were not disclosed.