What Happened?
Shares of HR and payroll software provider Paylocity (NASDAQ: PCTY) jumped 3.3% in the afternoon session after private equity firm Thoma Bravo lined up a bid to acquire one of its competitors, Dayforce (DAY).
The potential acquisition of competitor Dayforce (DAY) sent its shares rocketing over 20% and created a positive ripple effect across the human resources technology sector. According to a Bloomberg report, Thoma Bravo is looking to take Dayforce private in a deal that could be announced within weeks, valuing the company at around $8.4 billion. This news highlights a growing trend of consolidation within the software and HR Tech industries, where private equity firms are increasingly targeting established companies. For investors, a major acquisition like this often leads to a re-evaluation of valuations for similar companies in the space, such as Paylocity, on the speculation of further M&A activity or simply because the sector is seen as more valuable.
After the initial pop the shares cooled down to $178.28, up 3.7% from previous close.
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What Is The Market Telling Us
Paylocity’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Paylocity is down 8.6% since the beginning of the year, and at $178.28 per share, it is trading 18.2% below its 52-week high of $217.86 from February 2025. Investors who bought $1,000 worth of Paylocity’s shares 5 years ago would now be looking at an investment worth $1,351.
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