Blackstone and Singapore sovereign wealth fund GIC Private Limited have agreed to make a minority investment of $750 million in Kronos in return for a 44% equity interest. Blackstone and GIC will invest in Kronos alongside existing investors Hellman & Friedman and JMI Equity. Hellman & Friedman will remain the majority investor in the company. The transaction is expected to close in the first half of 2014.
Kronos is a provider of workforce management software and related services. The company’s products and services are used by tens of thousands of companies and more than half of the Fortune 1000 to control labor costs, minimize compliance risk, and improve workforce productivity. The company was originally a manufacturer of time-clocks and introduced the world’s first microprocessor-based time-clock in 1979. Kronos was founded in 1977 and is headquartered north of Boston in Chelmsford, MA (www.kronos.com).
“We are thrilled to have Blackstone and GIC join the Kronos team. Their significant investments validate our company’s strategy and growth potential and support us as we rapidly extend our Kronos cloud offerings; expedite our pace of product innovation; continue to broaden our vertical expertise; and accelerate our global expansion strategy,” said Aron Ain, chief executive officer of Kronos.
Kronos was taken private by Hellman & Friedman and JMI Equity in March 2007 in a transaction valued at just over $1.7 billion. Since that time, Kronos revenues have increased 45 percent and EBITDA has increased 114 percent. Kronos is fast approaching $1 billion in annual revenue.
“Kronos has the unique combination of industry leadership and expertise, entrepreneurial spirit, market-leading products, and a loyal customer base. The company has tremendous potential and we are excited to partner with the Kronos management team on growth initiatives,” said Chinh Chu, a Blackstone Senior Managing Director.
Blackstone is one of the world’s leading investment and advisory firms. The firm’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-focused funds and closed-end funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Blackstone is based in New York (www.blackstone.com).
“As a long-term investor, GIC has been following the Kronos story since Hellman & Friedman’s initial investment. The company’s track record speaks for itself, and we are delighted to work with management and our partners to drive Kronos’ continuing success,” said Eric Wilmes, head, North America Direct Investments Group, GIC Special Investments.
GIC Private Limited is among the world’s largest fund management companies with assets under management of more than $100 billion. GIC was founded in 1981 to manage Singapore’s foreign reserves and to become an active global private equity investor through investments in private equity funds as well as directly in companies. GIC is headquartered in Singapore with a network of offices in nine cities worldwide (www.gic.com.sg).
© 2014 PEPD • Private Equity’s Leading News Magazine • 2-21-14