Ceridian in $5.3bn buy-out

Ceridian, the payments and processing company that has been fighting activist investors, on Wednesday struck a deal to sell itself for $5.3bn to a consortium including Thomas H Lee Partners, the US private equity group, and Fidelity National Financial, the insurance company.

If completed, the deal will end a period of turmoil at Ceridian, which has faced a campaign of criticism by large shareholders including William Ackman of Pershing Square Capital Management and Ralph Whitworth of Relational Investors.

THL and FNF are paying $36 a share in cash for Ceridian – slightly more than the company’s closing value of $34.19 on Wednesday. The company said the purchase price was 17 per cent higher than its value in mid-February, when it announced the appointment of investment bankers at Greenhill to explore its options.

THL and FNF are expected to bring co-investors into the deal, which is becoming a common practice in larger private equity takeovers as it allows buyers to maintain control while diluting risk.

Mr Ackman’s reaction to the deal will be key to its fate. He could not be reached for comment last night. Relational sold its stake in Ceridian earlier this year.

Deutsche Bank is advising the buyers.