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ADP, Celergo: Game-Changer Or Not.

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I recently saw a quote regarding the recent acquisition of Celergo by ADP: It was hailed a “game-changer,” and I want to discuss it further.

First, I want to congratulate Michele and the Celergo team for such an awesome accomplishment. As the founder of a company, I know just how difficult it is to build a thriving business. Healthy competition is one of the ingredients necessary to build truly differentiated value, and I firmly believe we are better for having competed with Celergo. I wish Michele and her team nothing but success in their new ADP home!

This is undeniably a big change in our industry, so I’ve given the moniker of “game-changer” quite a bit of thought. While I agree with the title in definition, I do not in spirit. Like all changes, it’s not always positive depending on your perspective.

It’s clearly a game-changer for the team at Celergo. They have realized fruits of their labor and undoubtedly will work to earn-out more fruit over the next few years. It’s a game-changer for ADP who adds yet another asset to their tool chest — one they will work hard to justify and monetize over time. It’s a positive game-change for us at Safeguard Global. To us, it’s just more opportunity.

However, a key stakeholder’s game changed for the worse: the customer’s. Healthy competition breeds innovation, and customers want ever-evolving and innovative solutions to their problems. One less option on the market only hurts the buyer. ADP won’t carry the innovative torch Celergo did, or else they wouldn’t need to buy them in the first place. ADP made an investment; they will work hard to monetize it while minimizing additional capital outlay.

I don’t have a bias against businesses like ADP — their acquiring capabilities round out offerings and deliver higher value to the market. If the acquisition is ultimately in the best interest of delivering higher value to customers, everybody wins.  When acquisitions are motivated by the buyer’s need to maintain growth, however, they aren’t typically beneficial for the customer.

Time will tell whether ADP will allow Celergo to carry the torch of innovation it once did. In the meantime, we will continue to take on the most complex problems payroll practitioners face and ensure our customers experience the positive game-changes. We don’t know any other way.

Again, congrats to Celergo, and good luck — we will miss you!

Bjorn Reynolds, CEO

Bjorn Reynolds, CEO

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