Intuit is to acquire US online payroll outfit PayCycle for $170 million in an all-cash transaction.
Privately held PayCycle, based in Palo Alto, offers online payroll services to 85,000 small businesses. PayCycle also powers payroll services for leading financial institutions including Capital One and PNC Bank.
Intuit says the acquisition will further its online capabilities and provide a foothold to PayCycle's financial institution partners and their small business customers.
"We'll offer small businesses a range of low-cost, high-value alternatives to expensive payroll outsourcers and time-consuming, error-prone manual payroll methods," says Nora Denzel, senior vice president and general manager of Intuit Employee Management Solutions. "In addition, the acquisition will enable Intuit to develop and deploy the next generation of online payroll tools more quickly."
The transaction is expected to close during the third quarter, subject to regulatory review. Intuit expects the acquisition to reduce its GAAP earnings by approximately 2 cents per share in the fourth quarter, but to have no material impact thereafter.