H.I.G. Capital Signs Definitive Agreement to Acquire Alight’s Payroll and Professional Services Business

Rhea-AI Summary

H.I.G. Capital's affiliate is set to acquire Alight, Inc.'s Payroll and Professional Services Business for up to $1.2 billion. The Company offers technology-enabled payroll, human capital management, and professional services to over 1,500 multinational clients worldwide. The acquisition aims to create a global leader in payroll and professional services, leveraging strong partnerships with leading cloud technology providers like Workday and SAP.

Insights

Financial Analyst

The acquisition of Alight's Payroll and Professional Services by an affiliate of H.I.G. Capital, valued at up to $1.2 billion, represents a significant strategic move in the technology-enabled payroll and human capital management sector. The transaction indicates H.I.G.'s confidence in the growth potential of this industry, particularly in the context of increasing global business complexity and the demand for integrated technology solutions. Financially, the deal is substantial, given that H.I.G. manages $60 billion in capital; this investment reflects a targeted approach to expand their portfolio in the high-demand services sector.

From an investor's perspective, this acquisition could signal potential for increased revenue streams for H.I.G. Capital, leveraging the Company's established client base of over 1,500 multinational corporations. The focus on technology and services, including partnerships with Workday and SAP, suggests a strategic alignment with ongoing digital transformation trends across global enterprises. The deal might also result in operational synergies and cost efficiencies, potentially improving profit margins over time.

Market Research Analyst

The market for payroll and professional services is evolving rapidly, driven by technological advancements and a shift towards cloud-based solutions. The acquisition by H.I.G. Capital underscores the growing appetite for investments in technology-enabled services that offer end-to-end solutions. This move is likely to enhance the competitive positioning of the acquired entity, allowing it to capitalize on the trend of outsourcing complex HR and payroll functions.

Given the strong partnerships with Workday and SAP, the Payroll and Professional Services Business is likely to benefit from the integration with these established cloud technology providers, potentially increasing market share. For stakeholders, the focus on a standalone entity dedicated to payroll and professional services could result in a more concentrated strategy and clearer brand identity, which is beneficial for marketing and client acquisition efforts.

Legal Expert

The involvement of prominent legal counsel firms in the transaction, such as Kirkland & Ellis LLP for H.I.G. Capital and Simpson Thacher & Bartlett LLP for Alight, indicates the deal's complexity and the importance of navigating regulatory and compliance issues in the payroll and professional services space. This sector is subject to stringent data protection laws, employment regulations and cross-border compliance challenges.

For businesses operating globally, the ability to manage these legal intricacies effectively is a key value proposition. The acquisition could therefore enhance the Company's service offering by potentially expanding its expertise in legal and compliance aspects of payroll and HR services, which is a critical consideration for multinational clients.

NEW YORK--(BUSINESS WIRE)-- H.I.G. Capital (“H.I.G.”), a leading global alternative investment firm with $60 billion of capital under management, is pleased to announce that one of its affiliates has signed a definitive agreement to acquire the Payroll and Professional Services Business (“Payroll & Professional Services” or the “Company”) of Alight, Inc. (“Alight”, NYSE: ALIT) for up to $1.2 billion.

The Payroll and Professional Services Business is a leading global provider of technology-enabled payroll, human capital management, and professional services. The Company provides a full suite of end-to-end technology and services, including U.S. and multi-country global payroll, HR administration & outsourced services, cloud technology advisory and deployment & application managed services. Through its differentiated end-to-end solution offering and strong partnerships with leading cloud technology providers such as Workday and SAP, the Company serves more than 1,500 blue-chip, multinational clients across the world.

“We are excited to partner with H.I.G. to establish a standalone global leader in payroll and professional services. By focusing our investments and energy on enhancing our highly differentiated, end-to-end technology and service capabilities, we will be able to add significant incremental value for our clients. With H.I.G.’s support, expertise, and resources, as well as our continued commercial partnership with Alight, we are well-positioned as the partner of choice for global enterprises,” said Luca Saracino, Head of the Payroll and Professional Services Business.

“We are thrilled to partner with Luca and the entire Payroll & Professional Services team,” commented Matt Lozow, Managing Director at H.I.G. “As businesses grow increasingly global and face complex technology and compliance requirements, we believe that the Company is uniquely positioned to help clients address the many challenges which this creates. We see a tremendous opportunity for continued growth and look forward to working with the team to build upon their success and leadership position in the market.”

Guggenheim Securities, LLC served as financial advisor, and Kirkland & Ellis LLP served as legal counsel to H.I.G. Capital. J.P. Morgan Securities LLC served as financial advisor, and Simpson Thacher & Bartlett LLP served as legal counsel to Alight.

About Payroll and Professional Services Business

The Payroll and Professional Services Business is a global leader in full-lifecycle human capital management and payroll technology and services. With over 8,000 employees across the world, the Company provides an end-to-end offering of technology and services, including U.S. and multi-country global payroll, HR administration & outsourced services, and cloud technology advisory deployment & application managed services. Through its differentiated breadth of services, proprietary technology, and decades-long commitment to innovation, the Payroll and Professional Services Business delivers mission-critical solutions to more than 1,500 of enterprise clients across 185 countries. For more information, visit alight.com/solutions/payroll or alight.com/solutions/professional-services.

About H.I.G. Capital

H.I.G. Capital is a leading global alternative investment firm with $60 billion of capital under management.* Based in Miami, and with offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York, and San Francisco in the United States, as well as international affiliate offices in Hamburg, London, Luxembourg, Madrid, Milan, Paris, Bogotá, Rio de Janeiro, São Paulo, and Dubai, H.I.G. specializes in providing both debt and equity capital to small and middle market companies, utilizing a flexible and operationally focused/ value-added approach:

• H.I.G.’s equity funds invest in management buyouts, recapitalizations, and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses.
• H.I.G.’s debt funds invest in senior, unitranche, and junior debt financing to companies across the size spectrum, both on a primary (direct origination) basis, as well as in the secondary markets. H.I.G. also manages a publicly traded BDC, WhiteHorse Finance.
• H.I.G.’s real estate funds invest in value-added properties, which can benefit from improved asset management practices.
• H.I.G. Infrastructure focuses on making value-add and core plus investments in the infrastructure sector.

Since its founding in 1993, H.I.G. has invested in and managed more than 400 companies worldwide. The Firm's current portfolio includes more than 100 companies with combined sales in excess of $53 billion. For more information, please refer to the H.I.G. website at hig.com.

*Based on total capital raised by H.I.G. Capital and its affiliates.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240315472283/en/

Matt Lozow

Managing Director

mlozow@hig.com

Kyle Fitzgerald

Principal

kfitzgerald@hig.com

Source: H.I.G. Capital

FAQ

What is the deal between H.I.G. Capital and Alight, Inc. regarding ALIT?

H.I.G. Capital's affiliate is acquiring Alight, Inc.'s Payroll and Professional Services Business for up to $1.2 billion.

What services does the Payroll and Professional Services Business of Alight, Inc. offer?

The Company provides technology-enabled payroll, human capital management, and professional services, including U.S. and multi-country global payroll, HR administration & outsourced services, cloud technology advisory, and deployment & application managed services.

How many clients does the Payroll and Professional Services Business of Alight, Inc. serve?

The Company serves more than 1,500 blue-chip, multinational clients across the world.

Which cloud technology providers does the Payroll and Professional Services Business of Alight, Inc. partner with?

The Company has strong partnerships with leading cloud technology providers such as Workday and SAP.

Who will lead the Payroll and Professional Services Business after the acquisition?

Luca Saracino, Head of the Payroll and Professional Services Business, will lead the Company after the acquisition.