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The Human Capital Management (HCM) technology sector is experiencing a particularly dynamic start to 2025, with a surge in mergers and acquisitions (M&A) dominating the landscape. In the first quarter of the year, we’ve seen a significant uptick in activity, signaling a period of rapid transformation within the industry. M&A activities are consolidating and reshaping the HCM ecosystem in profound ways. Let’s explore this trend and how this could affect your company and the choices you make.
What are mergers and acquisitions (M&A)?
What are mergers and acquisitions (M&A)? How are they different? A merger is when two companies come together to form a single entity, usually creating a new corporation. The best example of a recent merger is when Ultimate Software and Kronos merged to create UKG. An acquisition is different as it results when one software vendor purchases the product and/or customer base of another vendor. The best example of this is when Paylocity acquired Blue Marble. The company remains Paylocity, and they incorporated Blue Marble’s international payroll product into what is now Paylocity Global HR/Payroll.
Why the M&A Frenzy? There are five major factors that are fueling M&A activity. They include: Consolidation for More Comprehensive Suites:
