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Blackstone, GIC draw closer to $750m deal for Kronos minority stake

20 Feb 2014

people_crowdUS private equity firm Blackstone Group and Singapore sovereign wealth investor GIC are close to a deal for a minority stake in human resources software business Kronos, according to Reuters.

The deal, which would see a combined investment of $750m for a 40 per cent stake, would value the company at around $4.5bn.

The company was acquired by private equity firms Hellman & Friedman and JMI Equity for $1.8bn back in 2007. Earlier this year the pair were said to have rejected under value buyout bids, offering a minority stake instead.

The firms agreed to lower their valuation by retaining control of the company and avoiding a so-called “control premium”, the report said. Buyout firms previously said to be interested included KKR, TPG Capital and Bain Capital.

Hellman & Friedman and JMI have extracted dividends of over $1.5bn over their six-year ownership, having invested only $753m in equity. In 2013, Kronos arranged a $490m dividend recapitalisation.

Ealier this month Kronos reported revenue for the quarter had increased nine percent to $243.4m, while EBITDA increased 18 per cent to $78.7m. The company provides workforce management services in the cloud to more than half of the Fortune 1000 . Services include industry-specific time and attendance, scheduling, absence management, HR and payroll, hiring and labour analytics applications.

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