Intuit Inc. has inked a $170 million deal to acquire PayCycle Inc., an online payroll service provider to small business members and customers at credit unions and banks.
The acquisition will give small businesses online payroll and provide thousands of accountants with the ability to offer as stand-alone payroll providers for their small business customers, according to Intuit in Mountain View, Calif.
The transaction is scheduled to close during the third quarter. Intuit said it expects the acquisition to reduce its GAAP earnings by approximately two cents per share in the fourth quarter of fiscal year 2009 and does not expect the acquisition to have a material effect on fiscal year 2010 earnings.
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After the transaction is complete, Palo Alto, Calif.-based PayCycle will become part of Intuit's small business group. PayCycle CEO Heeger will serve as a strategic advisor to Intuit for six months to help ensure a smooth integration of the two companies. Intuit said it had annual revenue of $3.1 billion in its fiscal year 2008. The company has approximately 8,000 employees. PayCycle serves more than 85,000 small businesses.
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