(Bloomberg) -- Paychex Inc. agreed to acquire rival payroll processor Paycor HCM Inc. for about $4.1 billion in cash, including debt. 

The company is paying $22.50 per share for Cincinnati-based Paycor, according to a statement Tuesday. That’s 21% higher than the price on Friday, before Bloomberg News reported on Sunday that talks were underway.

The deal brings together two major players in the market for human-resources software and services, a fairly fragmented market experiencing recent consolidation. Automatic Data Processing Inc. agreed in October to acquire WorkForce Software. 

The acquisition “will enhance our capabilities upmarket, broaden our suite of AI-driven HR technology capabilities, and provide new channels for sustained long-term growth,” Paychex Chief Executive Officer John Gibson said in the statement. 

Paycor’s cloud-based software helps small and medium-size businesses automate and streamline their human-capital and payroll needs and is used by more than 30,000 customers in all 50 US states, according to its website. Rochester, New York-based Paychex offers human resources, employee-benefits, insurance and payroll services to more than 745,000 customers in the US and Europe.

“Paychex is committed to maintaining our dividend policy and strong balance sheet, and has obtained committed financing to support the transaction, which is expected to be funded with incremental debt,” the company said in the statement.

Paycor’s largest shareholder is an entity controlled by private equity firm Apax Partners. In 2022, the company secured a naming rights deal for the home stadium of the Cincinnati Bengals. 

The deal — Paychex’s largest ever — is slated to be completed in the first half of this year.

JPMorgan Chase & Co. advised Paychex on the deal while Paycor was advised by Goldman Sachs Group Inc. 

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