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
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3 comments:
No wins by Deploy - they most recently won the Home Depot account against stiff competition. With WalMart already with them, they are (were) providing solutions to 2 out of 3 top retailers in the world.
Hello "Anonymous" (please provide your name when posting - we normally do not post anonymous comments but I thought this was a good one):
I believe Deploy had already been working with Home Deploy prior to this year's RFP - which I believe was for "part" of Home Depot, not the entire company. Same for WalMart. But I may be wrong - please correct me if I am. Just because they have these companies on their client list does not mean they are lucrative accounts.
I always thought of Deploy and Virtual Edge as mirror images.
Both heavy on marketing as a design strategy and both appealing to 'safety' buyers (always touting customer names and being totally vanilla on the approach).
It balances in a way, as Kronos is to ADP in a similar frame of being big big big and safe safe safe.
Who is the next to go ? Vurv has to be a nice target for their client base- bigish and dying for a technology refactor. They get my vote.
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