Workforce.com

Kronos Snaps Up Hourly Workforce Specialist Unicru

July 13, 2006

HR technology provider Kronos has decided it's time to get into the talent acquisition game.

Chelmsford, Massachusetts-based Kronos on Thursday announced plans to buy Beaverton, Oregon-based Unicru for $150 million in cash.

The deal is a sign of the growing interest in pre-employment assessment, and further expands Kronos past its roots as a maker of time-and-attendance technology systems. Unicru specializes in software used to assess and hire hourly workers. Its customers tend to be large employers, such as Best Buy, Toys "R" Us and Marriott.

Kronos, which sells a variety of workforce management software products including payroll and scheduling applications, says the combination of companies will let customers integrate employee selection strategy with actual labor performance and connect labor planning to hiring.

Jim Holincheck, research vice president at market analysis firm Gartner, says that the deal should allow Kronos to pitch additional services to its many customers with large hourly workforces. It also marks Kronos' first step into the talent management arena with a firm known for sophisticated analysis of candidate and worker data.

"The scientists that Unicru has on board are very smart," he says. "That's part of the value for Kronos."

Unicru is slated to operate as Kronos' talent management division, headquartered in Beaverton. Unicru chief executive Chris Marsh will join Kronos as president of the division. The acquisition is expected to close this year.

"Kronos views this strategic acquisition as fundamentally changing the landscape of workforce management," Aron Ain, Kronos' CEO, said in a statement. "Importantly, this acquisition moves us significantly closer to our goal of becoming the first $1 billion software company focused exclusively on meeting the human capital management needs of both large enterprises and small- and medium-size organizations on a worldwide basis."

Founded in 1977, Kronos posted revenue of $519 million in its last fiscal year. Unicru, which was founded in 1987, is on pace to post revenue of $46 million in 2006, says Brad McMahon, Unicru vice president of corporate development. Unicru's revenue has been growing at a rate of 25 percent to 35 percent annually the past several years, McMahon says.

The move is part of a broader consolidation trend in the area of recruiting technology.

Holincheck says Unicru made a more palatable target for Kronos than other recruiting software firms such as Vurv, given Unicru's focus on hourly hiring in particular industries such as retail. He also says Unicru customers should have little fear that their products will be neglected once the company is gobbled up—a common concern when tech firms merge.

Kronos "is not necessarily a bad destination," Holincheck says. "For example, they're not going to abandon the retail sector."

--Ed Frauenheim