Intuit Completes PayCycle Acquisition

Intuit has completed its $170 million acquisition of PayCycle, expanding the company’s online services strategy with a payroll provider that counts more than 85,000 small businesses as customers.

“Acquiring PayCycle allows Intuit to accelerate our online growth strategy,” said Intuit spokesman Rich Walker. “Intuit and PayCycle share a common vision: using the Internet to deliver a secure and easy-to-use payroll solution to small businesses. The acquisition expands the online capability of Intuit’s payroll offering and strengthens the company’s position as a provider of software as a service for small businesses.”

Intuit announced the acquisition in early June (see Intuit to Acquire PayCycle for $170 Million). The company has been selling its own Intuit Online Payroll and QuickkBooks Payroll products. Now that the acquisition has been completed, Intuit and PayCycle are integrating their teams and beginning to develop the next generation of a combined online payroll product.

PayCycle is joining Intuit's small business group, which already services more than 1 million small-business payroll customers. Together, the companies are expected to accelerate the growth of Intuit’s online payroll services for small businesses.

Intuit expects the acquisition to reduce its GAAP and non-GAAP earnings by approximately 2 cents per share in the fourth quarter of its 2009 fiscal year, which ends July 31. The charges primarily reflect costs associated with the write-down of software previously developed by Intuit and with integrating the two companies’ workforces. Intuit does not expect the acquisition to have a material impact on fiscal year 2010 earnings.