• Deel, a payroll and compliance platform that facilitates international employment, has entered a public offer to acquire Australian payroll provider PayGroup in a reportedly all-cash deal worth AUD 119.3 million (approx. USD 82.6 million). PayGroup’s board has unanimously recommended its shareholders vote in favor of the deal; if approved, the deal is expected to close in October 2022. As part of the deal, ~400 of PayGroup’s employees in Asia will be joining Deel.

• Founded in 2006, PayGroup is a leading provider of payroll and human capital management (HCM) solutions, primarily serving corporate, contractor, and franchise sectors across the Asia-Pacific (APAC) region. The company processes ~AUD 11 billion (approx. USD 8 billion) in annual payroll for over 2,800 companies. PayGroup is currently listed on the Australian Securities Exchange with a market cap of ~AUD 112.3 million (approx. USD 77.9 million).

• The acquisition is expected to combine the payroll technologies of both companies and expand Deel’s global presence, especially in the APAC region. It also complements Deel’s plans to enable its customers to consolidate their local entity payrolls into a single dashboard to be used by contractors and employees.

<ul><li> Analyst QuickTake: The move can be considered the latest part of Deel’s overarching growth strategy to strengthen its in-house offering to prepare itself for rapid international expansion. For instance, in January 2022, Deel acquired Roots , an HR platform for team culture improvement and employee wellness, to help its customers better manage remote work. It also acquired AI-based payroll and automated bookkeeping software provider Zeitgold in August 2021 to broaden its core offering and reinforce its presence in the European market. The company also disclosed that it is eyeing further M&A opportunities at the time of its USD 50 million funding round in May 2022 .</ul>