Texas HCM (human capital management) expert Asure Software started the year with a bang, as the maker of digital tools for managing employees secured three deals before most people had shaken off the new year’s confetti.
Asure has acquired third-party administrator Savers Administrative Services, workers compensation management outfit Pay Systems of America and TelePayroll, which handles payroll, taxes, employee benefits and other services on behalf of companies. All three companies already sell Asure’s human resource information system.
“These new acquisitions provide us with significant customer, product and financial synergies. In particular, they expand Asure’s footprint across the US,” Asure CEO Pat Goepel said in a statement. “Given that all three service bureaus have been resellers of our leading HCM solutions, we are confident that we can quickly and effectively integrate these acquisitions into our business, and be able to achieve meaningful revenue and EBITDA improvements in 2018.”
The deals set Asure back by $31 million. The market was clearly happy about the bold move, sending Asure’s shares up 7.9%. The three acquisitions are expected to add about $13 million to Asure’s top line in 2018. Each new addition has a specific rationale:
“The [deals] expand Asure’s footprint across the US, giving us greater coverage nationwide, especially on the West Coast with our acquisition of TelePayroll. Savers Administrative marks our entry into the Carolinas, while our acquisition of Pay Systems of America solidifies our expansion into the Southeast, a region where we’ve had increasing success,” said Goepel.
Asure (not to be mistaken for Microsoft Azure) is a smaller player in the HCM market, competing with the likes of Workday, Oracle, and ADP. Asure, which is focusing on SMEs with 50-2000 employees, has been looking for deals to bolster its position among these larger rivals. Asure’s goal is to provide a comprehensive platform for the middle market, where there’s an opportunity for smaller contenders to carve out their own niche. We expect to see more deals from Asure – and similarly sized peers – as they move to embrace this opportunity.
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