Coalesce Capital Acquires DecisionHR in $450M Private Equity Play

CHICAGO, IL – January 13, 2026

By Matthew Richardson

In a significant move highlighting private equity's deepening interest in the human resources technology sector, private equity sponsor Coalesce Capital has completed its acquisition of DecisionHR Holdings, Inc., a national provider of professional employer organization (PEO) services. The transaction, reportedly valued at approximately $450 million, was facilitated by a senior credit facility led by premier asset management firm Monroe Capital LLC.

Monroe Capital acted as the lead-left, administrative agent on the financing, providing the critical debt structure that enabled Coalesce to acquire the St. Petersburg, Florida-based HR outsourcing specialist. The deal underscores a powerful trend of consolidation within the rapidly expanding PEO market, where technology and scale are becoming paramount for serving the complex needs of small and mid-sized businesses (SMBs).

Founded in 1996, DecisionHR has established itself as a key player in the HR outsourcing space, providing bundled services that include payroll and tax administration, workers' compensation, risk management, and employee benefits. The company serves approximately 1,700 business clients, managing the HR needs for a combined total of around 47,000 workers across the United States.

Private Equity's Growing Appetite for HR Services

The acquisition is emblematic of a larger strategic push by private equity into the business services sector, particularly firms that cater to the essential, non-discretionary needs of SMBs. The global PEO market, valued at over $73 billion in 2025, is projected to more than double to $170.8 billion by 2033, growing at an aggressive compound annual growth rate (CAGR) of 11.10%. This growth is fueled by several powerful tailwinds.

Increasingly complex state and federal labor laws, coupled with the administrative burdens of managing payroll, benefits, and compliance with regulations like the Affordable Care Act, are driving more SMBs to outsource their HR functions. PEOs offer a compelling value proposition: they allow smaller companies to access enterprise-level benefits and HR expertise, reduce administrative overhead, and mitigate compliance risks. Studies indicate that PEO clients can save an average of $1,775 per employee annually through reduced costs.

Coalesce Capital, a firm with a stated focus on human capital-driven and technology-enabled services, views DecisionHR as perfectly positioned to capitalize on these trends. The investment thesis is built on the conviction that outsourcing HR is becoming an essential practice for small businesses seeking to compete effectively. Coalesce plans to leverage its capital and sector expertise to accelerate DecisionHR's growth trajectory. The strategy includes significant investments in modernizing the company's technology stack, expanding its commercial footprint, and pursuing strategic bolt-on acquisitions to further consolidate market share. The existing management team at DecisionHR is expected to remain in place and retain a significant ownership stake, ensuring leadership continuity.

The Architects of Middle-Market Deal Flow

This high-value transaction would not be possible without the sophisticated financial architecture provided by private credit firms like Monroe Capital. As the direct lending market continues to mature, firms like Monroe have become indispensable partners for private equity sponsors executing middle-market buyouts. By acting as the lead-left, administrative agent, Monroe not only provided a substantial portion of the capital but also managed the lending syndicate, streamlining the financing process for Coalesce.

With approximately $23 billion in assets under management, Monroe Capital is a heavyweight in the private credit world. The firm specializes in providing senior secured financing to lower middle-market companies, typically those with an EBITDA of $35 million or less. Its strategy focuses on rigorous credit selection and active portfolio management to generate attractive risk-adjusted returns, a model that has attracted significant institutional capital.

Recently, Monroe closed its largest private credit vehicle to date, Fund V, bringing its total investable capital for its flagship strategy to $6.1 billion. This substantial dry powder positions the firm to continue funding strategic acquisitions across its target sectors, which include business services, technology, and healthcare. The financing for DecisionHR fits squarely within Monroe's investment mandate, which favors backing established businesses with strong market positions and clear growth potential under the stewardship of a reputable private equity sponsor.

A New Chapter for DecisionHR and its SMB Clients

For the thousands of small and mid-sized businesses that rely on DecisionHR, the acquisition by Coalesce Capital marks the beginning of a new chapter. The infusion of private equity capital is expected to translate into tangible enhancements in service delivery and technological capabilities. Coalesce's commitment to investing in a modernized technology platform could lead to a more streamlined, user-friendly experience for clients, with improved data analytics and automation features.

The industry is rapidly moving beyond basic payroll processing. Today's PEOs are expected to be strategic partners, offering comprehensive solutions that cover the entire employee lifecycle, from talent acquisition to engagement and retention. With Coalesce's backing, DecisionHR is better positioned to expand its service offerings and compete with larger, technology-forward rivals.

Furthermore, the plan to pursue bolt-on acquisitions suggests a strategy aimed at achieving greater economies of scale. This could enable DecisionHR to offer more competitive pricing on benefits and insurance products, a key selling point for cost-conscious SMBs. As the PEO market continues its consolidation trend, driven by the dual engines of private equity investment and private credit financing, the evolution of firms like DecisionHR will be critical in shaping the future of how American small businesses manage their most valuable asset: their people.