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Kronos Inc. to Be Acquired by Investment Firm in Deal Worth $1.8 Billion

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Kronos Incorporated, a leading provider of human capital management solutions, has announced it has signed a definitive agreement to be acquired by the private equity firm Hellman & Friedman Capital Partners VI, L.P. and its related funds in a transaction valued at approximately $1.8 billion. Under the terms of the agreement, Kronos shareholders will receive $55 in cash for each share of Kronos common stock, representing a 34.4 percent premium over Kronos' closing share price from 20 trading days ago.

Hellman & Friedman LLC is a leading private equity investment firm with offices in San Francisco, New York, and London and is currently investing its sixth fund, which has over $8 billion of committed capital. Investing alongside lead investor Hellman & Friedman will be JMI Equity, a private equity firm focused exclusively on the software and business services industries. "We are pleased to announce this agreement, which represents the culmination of a thorough review of our standalone plan and strategic alternatives," said Mark S. Ain, executive chairman of the Kronos Board of Directors. "Our board of directors believes this transaction is in the best interests of our shareholders and affirms Kronos' tremendous value, market-leadership, and the exciting growth opportunities in front of us."

"Hellman & Friedman will be a great partner for Kronos. They have tremendous capital resources, significant expertise in software and technology, and a proven track record of building leading global companies. Importantly, Hellman & Friedman shares our commitment to accelerate our global and talent management expansion initiatives as we work together to achieve our goal of becoming the first billion dollar company exclusively focused on human capital management," said Kronos Chief Executive Officer Aron Ain. "Kronos remains deeply committed to the markets we serve, and we now expect to have even greater flexibility to invest in our customers, technology, and people."

"We believe Kronos is a uniquely positioned global software and services company," said David Tunnell, managing director of Hellman & Friedman LLC. "It has a strong franchise with leading positions in large and growing markets and a world-class management team. We look forward to working with Kronos to serve its current and future customers and to achieve its long-term business goals."

Kronos' board of directors has approved the merger agreement and has resolved to recommend that shareholders adopt the agreement. Pending the receipt of shareholder approval and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other required regulatory approvals, as well as satisfaction of other customary closing conditions, the transaction is expected to be completed in the fourth quarter of fiscal 2007. The transaction will be financed through a combination of debt and equity financing and cash, cash equivalents, and short-term investments of Kronos. There is no financing condition to the obligations of the equity sponsors to consummate the transaction.

Jefferies Broadview, a division of Jefferies and Co., is acting as exclusive financial advisor to the special committee of the Kronos board of directors and provided a fairness opinion to the board. WilmerHale is acting as legal advisor for Kronos, and Simpson Thacher & Bartlett LLP is acting as legal advisor to Hellman & Friedman.

About Kronos Inc.

Kronos Inc. empowers organizations around the world to effectively manage their work forces. Kronos is comprised of experts who are focused on delivering software and services that enable organizations to reduce costs, increase productivity, improve employee satisfaction, and ultimately enhance the level of service they provide. Kronos serves customers in more than 50 countries through its network of offices, subsidiaries, and distributors. Widely recognized as a market and thought leader in managing the workforce, Kronos has unrivaled reach with more than 30 million people using a Kronos solution every day. To learn more about Kronos, visit www.Kronos.com.

About Hellman & Friedman LLC

Hellman & Friedman LLC is a leading private equity investment firm with offices in San Francisco, New York, and London. The Firm focuses on investing in superior business franchises and serving as a value-added partner to management in select industries, including financial services, professional services, asset management, software and information services, media and energy. Since its founding in 1984, the Firm has raised and, through its affiliated funds, managed over $16 billion of committed capital and is currently investing its sixth partnership, Hellman & Friedman Capital Partners VI L.P., with over $8 billion of committed capital. Other software and information services investments include: Activant Solutions Inc., Blackbaud, Inc, DoubleClick, Inc., Intergraph Corporation, Mitchell International, Inc, and Vertafore, Inc. Other recent investments include: Artisan Partners Limited Partnership, The Nasdaq Stock Market, Texas Genco LLC, and The Nielsen Company.

About JMI Equity

JMI Equity, based in Baltimore and San Diego, is a private equity firm exclusively focused on providing growth capital to software and service companies. Founded in 1992, JMI has invested in more than 80 companies throughout North America and has approximately $700 million of capital under management. In addition to providing the first institutional capital to self-funded companies, JMI also invests in selected recapitalization and management buyout financings. Representative investments include Blackbaud, Inc., DoubleClick, Inc., Jackson Hewitt, Inc., Mission Critical Software, Inc. (acquired by NetIQ, Inc), NEON Systems, Inc. (acquired by Progress Software Corporation), Transaction Systems Architects, Inc and Unica Corporation. For more information on JMI Equity, visit www.jmiequity.com.

Kronos is the global leader in workforce management solutions that enable organizations to control labor costs, minimize compliance risk, and improve workforce productivity. Tens of thousands of organizations in 60 countries — including more than half of the Fortune 1000— use Kronos time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics applications. To learn how Kronos uniquely delivers complete automation and high-quality information in an easy-to-use solution, visit www.kronos.com.

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