Company: PAYX
Filing Date: 2025-03-26
Form Type: 10-Q
Source: 0000950170-25-045216
Chunk: 37

Company: PAYCHEX INC
Filing Date: 2025-03-26
Form: 10-Q
Item: Part I, Item 8
Chunk 37
---
 LLC (“Alterna”), were acquired by a wholly owned subsidiary of the Company. Alterna purchases outstanding accounts receivable of their customers under non-recourse arrangements. This acquisition allows the Company to increase and diversify its portfolio of solutions and support serving small- to medium-sized businesses. The acquisition consideration was comprised of a base purchase price of $95.1 million plus immediate settlement of debt totaling $128.9 million, net of $15.7 million in cash and restricted cash acquired. Accounts receivable balances acquired, net of allowance for credit losses, and less amounts due to clients related to funding arrangements, totaled $146.1 million. Management determined that intangible assets related to the client list were $18.9 million to be amortized utilizing an accelerated method of amortization over a weighted average of 8 years. Goodwill in the amount of $46.7 million was recorded as a result of the acquisition, which is tax-deductible. The Company finalized the purchase price allocation for the acquisition of Alterna as of November 30, 2023. The financial results of Alterna are included in the Company’s consolidated financial statements from its respective date of acquisition. This acquisition was not material to the Company’s results of operations, financial position, or cash flows. On January 7, 2025, the Company entered into a definitive agreement to acquire Paycor HCM, Inc. ("Paycor") in an all-cash transaction for $22.50 per eligible share, without interest (the "Acquisition"). The Company expects the Acquisition will enhance its capabilities up market, broaden its suite of AI-driven HR Technology capabilities, and provide new channels for sustained long-term growth. The waiting period with respect to the consummation of the Acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired on February 21, 2025. The expiration of the waiting period satisfies one of the major conditions to the closing of the Acquisition, which remains subject to other customary closing conditions. The Company currently has a bridge commitment letter ("Bridge Loan Commitment") in place and expects to have long-term fixed financing in place prior to closing. The Acquisition is expected to close in April 2025, subject to customary closing conditions.

Note E: Other (Expense)/Income, Net Other (expense)/income, net, consisted of the following items: 

        For the three months ended

        For the nine months ended

        February 28,

        February