ROSELAND, N.J. - The payroll processor Automatic Data Processing Inc. on Monday announced it had agreed to buy ProBusiness Services Inc. for about $500 million in cash.
ProBusiness Services, of Pleasanton, Calif., provides outsourced employee administration services. The New Jersey company said it sees the acquisition as a way to boost its payroll and tax filing services and its benefits administration.
Automatic Data Processing will pay $17 for each share of ProBusiness. That represents a premium of 66% from ProBusiness's closing price of $10.26 on the Nasdaq.
ADP said it expects the acquisition, which requires shareholder and regulatory approvals, to reduce earnings by about a penny a share in the first year and add to earnings in the second year.
ADP provides payroll, tax regulatory management, benefits administration, time and labor management, retirement planning, online recruiting, and other employment-related services. It reported revenue of $7 billion for its fiscal year that ended June 30. ProBusiness Services' yearly revenue is about $170 million.
