Filing Flows › Paychex (PAYX) › Takeover & LBO
Is Paychex (PAYX) a takeover target?
A leveraged buyout at today's price plus 30% ($151.49 a share) would return about 4% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $92.33 a share (−21% against today's $116.53). Historically 2.4% of companies with its figures were bought within a year (0.48× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $151.49 | today's $116.53 plus 30% |
| × shares | 356.6 million | |
| = Equity value | $54.0B | |
| + Debt refinanced | $4.6B | |
| − Cash | $934M | |
| = Enterprise value | $57.6B | 19.0× EBITDA of $3.0B |
| Fees | $1.2B | 2% of the price |
| New debt | $16.7B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $42.1B | 72% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $7.1B | $3.3B | $1.3B | $1.3B | $15.3B |
| Year 2 | $7.6B | $3.5B | $1.2B | $1.6B | $13.8B |
| Year 3 | $8.0B | $3.7B | $1.1B | $1.8B | $12.0B |
| Year 4 | $8.4B | $3.8B | $916M | $2.0B | $10.0B |
| Year 5 | $8.6B | $4.0B | $761M | $2.2B | $7.7B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 14.9× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $59.0B | |
| − Debt left | $7.7B | |
| = Buyer's equity | $51.3B | |
| Money multiple | 1.22× | on $42.1B put in |
| Buyer's yearly return (IRR) | 4.0% |
Price against return
What the buyer makes at other premiums over today's $116.53; the IRR reaches 20% at $92.33 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $128.18 | 8.8% |
| 20% | $139.84 | 6.2% |
| 30% | $151.49 | 4.0% |
| 40% | $163.14 | 2.0% |
| 50% | $174.80 | 0.3% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $6.6B | |
| EBITDA, last 12 months | $3.0B | 45.9% of revenue |
| Depreciation and amortization | $443M | |
| Capital spending | $235M | |
| Debt | $4.6B | |
| Cash | $934M | |
| Share price | $116.53 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 24% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Paychex would cost about $163.14 a share, $58.2B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 14.7% | $133.66 | $47.7B |
| Median | 40% | $163.14 | $58.2B |
| High end (a quarter paid more) | 60.2% | $186.68 | $66.6B |
The odds, from history
Historically 2.4% of companies with its figures were bought within a year (0.48× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Paychex's latest quarter
Paychex, Q1 FY27: revenue $1.6B (+6% year over year), operating margin 38.0%, net earnings $430M, operating cash flow $414M. The chart follows the revenue to costs, profit and cash.
Questions
Is Paychex being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Paychex?
A leveraged buyout at today's price plus 30% ($151.49 a share) would return about 4% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $92.33 a share (−21% against today's $116.53).
What would a takeover of Paychex cost?
Takeovers in its sector paid a median premium of 40% over the share price before the deal (the middle half 14.7% to 60.2%), according to the 20 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Paychex would cost about $163.14 a share, $58.2B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.