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Back in 1999, former Intuit employees -- René Lacerte and Martin Gates -- saw an opportunity in building an affordable, web-based payroll system for small business. So, they started a company called PayCycle.
It was certainly prescient. In fact, this week PayCycle sold to Intuit (NASDAQ: INTU) for $170 million.
Besides having a strong on-demand offering, PayCycle also has a large customer base, which comes to roughly 85,000 small businesses. No doubt, this will be a lucrative cross-sell opportunity for Intuit. At the same time, PayCycle will help deal with the intense competitive environment, which includes players like ADP (NYSE: N) and Paychex (NASDAQ: PAYX).
"This acquisition adds strength to Intuit's payroll division by adding a very strong PayCycle product line. PayCycle has built a a really impressive user base by providing small businesses with an inexpensive online payroll (around $30-$40 per month) system that automates most payroll tasks and reminds business owners when to file their state and federal payroll reporting and make compliance payments."
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
6-03-2009 @ 10:18PM
baziz1 said...
Why did Intuit buy this company, when they sold their Payroll service to ADP in 2007. This doesn't make sense. They sell their Payroll business to ADP and now they go buy another one?
http://web.intuit.com/about_intuit/press_releases/2007/02-22a.html