Business Combinations (Tables)

12 Months Ended

May 31, 2026

Summary of the Components of the Purchase Consideration

The following table summarizes the components of the purchase consideration:


In millions, except per share amounts
Number of shares of Paycor common stock outstanding (1)		180.5
Cash consideration (per share of common stock)	$	22.50
Total cash consideration	$	4,060.6

Fair value of Paycor equity awards replaced by Paychex for pre-combination services (2)	$	25.1
Total equity consideration	$	25.1
Total purchase consideration	$	4,085.7

(1)

Represents outstanding shares of Paycor common stock as of April 11, 2025.

(2)

Represents the fair value of Paycor's stock-based compensation awards attributable to pre-combination services. ASC 805 requires that the fair value of replacements awards attributable to pre-combination service be included in consideration transferred.

Summary of Purchase Price Allocation

Purchase Price Allocation

During fiscal 2026, the Company adjusted its purchase price allocation, which increased goodwill $4.2 million, primarily resulting from the write-down of a building by $4.9 million, net of deferred taxes of $1.9 million as a result of an updated valuation, offset by a reduction due to a change in deferred tax liability of $3.9 million primarily related to return-to-provision adjustments from the predecessor's final tax return. The impact of these changes on previously reported earnings was not material.


In millions
Total purchase price	$	4,085.7
Assets Acquired
Cash and cash equivalents	$	168.8
Restricted cash		0.0
Interest receivable		0.7
Accounts receivable		26.5
Prepaid income taxes		1.0
Prepaid expenses and other current assets		28.7
Funds held for clients		1,288.2
Property and equipment		27.6
Operating lease right-of-use assets		14.1
Intangible assets		1,776.5
Other long-term assets		1.9
Total assets	$	3,334.0
Liabilities Assumed
Current liabilities	$	137.4
Client funds obligation		1,288.9
Deferred income taxes		339.3
Other long-term liabilities		74.5
Total Liabilities	$	1,840.1
Fair value of purchase consideration		4,085.7
Less: fair value of net assets		1,493.9
Goodwill	$	2,591.8

Summary of Preliminary Fair Values Allocated to Identifiable Intangible Assets and their Estimated Useful Lives

The final fair values allocated to the identifiable intangible assets and their final estimated useful lives are as follows:


In millions
Identifiable Intangible Assets	Estimated useful life (years)	Estimated fair value
Developed technology	7 years	$	367.0
Customer relationships	12 years		1,118.0
Trade name and trademarks	15 years		234.0
Naming rights	13.4 years(1)		57.5
Total		$	1,776.5

(1)

Naming rights are amortized over the remaining term of the underlying contract.

Summary of Unaudited Pro Forma Financial Information

The following unaudited pro forma consolidated results of operations are provided for illustrative purposes only and present the estimated unaudited pro forma combined results of Paychex and Paycor for years ended May 31, 2025 and 2024, as if the acquisition had occurred on June 1, 2023:


	Year ended May,
In millions	2025		2024
Revenues	$	6,206.7	$	5,933.2
Net income	$	1,580.2	$	1,405.4

- Definition

Tabular disclosure of business combination. Includes, but is not limited to, recognized asset and liability.

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