Deel has completed its $AU 121M acquisition of APAC-based payroll and HCM company PayGroup Limited. PayGroup is now part of Deel, a private San Francisco-based payroll company, and has been delisted from the Australian Stock Exchange.

Initiated in July 2022, the acquisition’s completion makes Deel a true leader in the global payroll and human capital management (HCM) space. It furthers Deel’s mission of helping millions of people work for the best companies in the world.

PayGroup has a strong presence in countries like Australia, New Zealand, India, Philippines, Singapore, Malaysia and Japan, processing roughly $AU 12 billion in payroll per year for over 3,000 businesses. The company has been steadily growing this year, targeting an annual recurring revenue of $AU 39 million, and is EBITDA positive.

PayGroup’s HCM and in-house payroll software provide solutions for enterprise clients spanning many industries, from staffing and workforce management companies, to retail and franchise clients like Nike and Subway. Its unique positioning in APAC has allowed the company to develop strong partnerships with some of the best global payroll companies in the world to power their platforms. Acquiring PayGroup means Deel has an even more powerful multichannel strategy for implementing its platform and technology - both directly and indirectly - to customers and partners.

Deel and PayGroup have been actively working on their integration, and today, with payroll coverage in 90+ countries, Deel and PayGroup now offer an unmatched solution on the market. They expect to announce a new merged version of their software solution in H1 2023, which will combine PayGroup’s 15+ years of expertise delivering HR and payroll software solutions with Deel’s simple, customer-centric platform. All of PayGroup’s team members have joined Deel.

Deel co-founder and CFO Philippe Bouaziz says of the acquisition: “Together, we are building the first truly global solution in the payroll and HCM industry, giving businesses around the world the ability to hire, pay, and manage the best talent, no matter where they’re located. The completion of the acquisition scales our payroll and HCM expertise, expands our customer base in the region, and reinforces our leadership in the global payroll space.”

About Deel

Deel helps companies hire anyone, anywhere through its global payroll and compliance platform. Companies can hire, manage, and pay independent workers and full-time employees in more than 150 countries, in a few minutes, compliantly.

The deal was first announced in June:

Deel Inc., a San Francisco-based global payroll and compliance firm, has struck a deal to acquire PayGroup Ltd., a publicly traded global payroll company based in Melbourne, Australia.

Deel’s offer would pay shareholders $1 in Australian currency (69 US cents) per share in an all-cash transaction. The deal implies a total equity value for PayGroup of approximately $119.3 million in Australian currency (US$82.6 million).

The PayGroup board has unanimously recommended its shareholders vote in favor of the deal. If approved, the acquisition is expected to complete in October.

The acquisition will expand Deel’s portfolio in the Asia-Pacific region.

“The value offered is testament to the strength of the PayGroup business we have grown over the last four years since listing on the ASX in 2018,” PayGroup Managing Director Mark Samlal said.

The acquirer, Deel, was founded in 2019 and has a presence in more than 150 countries. It aims to enable firms to hire remote workers and contractors. It raised a $425 million funding round in October 2021 at a company valuation of $5.5 billion.