Kronos buys Deploy. No Surprise.

When I heard that Deploy Solutions would not be exhibiting at this year's HR Technology event, my first thought was that Deploy was about to be acquired. So today's announcement that Kronos bought Deploy was not much of a surprise to me - and probably not to anyone who closely follows the space.

My guess is that Kronos picked up Deploy at a bargain, and that this was more of a strategic / technology acquisition than a customer acquisition (Deploy has been invisible for about a year and has had very few customer win announcements). Zach Thomas from Forrester wrote a great blog about the technology Kronos gets as a result of this acquisition.

Kronos will also realize some revenue as well as cost synergies. The revenue synergies will result from the better product Kronos will be offering to the hourly market as a result of the Deploy technologies. The cost synergies will result from the usual reduced head count reductions, shared product development, and the elimination of duplicative marketing projects (although Deploy was not a big spender on marketing).

Kronos' interest in Deploy is also strategic so they can own the market for the "hourly" recruiting space, where Deploy primarily focussed. In July, 2006 Kronos purchased Unicru - at the time, the leading vendor of recruiting technology for the hourly employee market - for $150 million. Now, with the Deploy acquisition, they have much less competition and may have more pricing control.

According to the Kronos press release, terms of the transaction were not disclosed.

The bottom line is this is a smart acquisition by Kronos who will be able to unlock a lot of the value and potential that Deploy Solutions had.

Posted by Mark Willaman

Labels: , ,