Paychex (PAYX) struck a deal to buy Paycor HCM (PYCR) in a $4.1 billion deal that will help the human resources and payroll solutions provider expand upmarket and boost its artificial intelligence capabilities.

The cash consideration of $22.50 per share represents a premium of 19% over Paycor's 30-day average price as of the unaffected trading date of Jan. 3, according to a statement released Tuesday. Shares of Paycor fell 3.1% midday trade while Paychex's rose 2.3%.

Human capital management company Paycor has about 2,900 employees that serve more than 49,000 clients and support roughly 2.7 million employees across the US. Paycor's investments in data, AI and other technologies since going public in 2021 have helped expand its upmarket position, the companies said.

"The acquisition of Paycor is highly complementary," Paychex Chief Executive John Gibson said. "It will enhance our capabilities upmarket, broaden our suite of AI-driven HR technology capabilities, and provide new channels for sustained long-term growth."

Paycor is majority owned by Apax Partners, which acquired its stake in November 2018. The company has tripled in size since Apax's original investment, Jason Wright, partner at Apax and Paycor board chair, said in a separate statement.

The companies' combined offering will be one of the most comprehensive in the industry while run-rate cost synergies are expected to exceed $80 million in the near term. In years following close, the companies project a "substantial revenue synergy opportunity."

The transaction is expected to close in the first half of 2025, pending regulatory approvals. Paychex plans to fund the acquisition with incremental debt and has obtained committed financing.

"We are confident that our customers will benefit from the shared expertise, resources, and innovative (human capital management) solutions of both companies to drive even greater people and business performance," said Paycor CEO Raul Villar Jr.