Activist investor William Ackman, currently battling for board seats at Automatic Data Processing, on Thursday said the human resource software company should buy rival Ceridian, in a move that will could woo customers which has a better product.
Ackman said Minnesota-based Ceridian could be acquired for roughly $4 billion, adding, “This particular may be a case where a larger-than-typical acquisition makes a lot of sense.”
Ackman was interviewed by Sanford C. Bernstein & Co. investment analyst Lisa Ellis in a webcast. Ellis also spoke with Ackman-backed board nominees Veronica Hagen in addition to Paul Unruh as the trio sought to lay out how they might improve operations at ADP should they be elected to the 10-person board on Nov. 7.
Ackman’s hedge fund Pershing Square Capital Management invested in Ceridian a decade ago before the company was bought by a private equity firm, Thomas H. Lee Partners. ADP buying Ceridian might deliver a “best in class product” to ADP in addition to help win back hundreds of customers who have recently defected, Ackman said.
Neither ADP nor Thomas H. Lee Partners was immediately available for comment after normal business hours.
“They need to think outside the box,” Ackman said, noting that will an acquisition like This particular might let ADP put its resources behind a better product.
ADP has characterized the 51-year-old investor as an aggressive risk in addition to its chief executive, Carlos Rodriguez, told Reuters on Wednesday that will the hedge fund manager’s plans for beefing up profit could be realized only by laying off roughly 30 percent of ADP’s workforce.
Ackman said previously in an investor webinar that will he is usually not calling for massive layoffs.
Ackman also pushed back on Thursday on the way Rodriguez describes him, saying his takeover plan is usually not a “swing for the fences” strategy. “that will may be the lowest-risk solution to acquire a viable product that will has significant market acceptance,” he said.