Billionaire B. Thomas Golisano, the founder and chairman of Paychex, the Rochester area firm valued at more than $25 billion, is open to merger talks with Buffalo based M&T Bank, whose market capitalization stands around $28 billion, a source familiar with his thinking tells The Chronicle.
Golisano is said to be excited about the concept because each firm’s business lines compliment the other, serving the same small business client, whether in commercial lending or in human resources and payroll services.
Each firm would expand the other’s geographic footprint. M&T Bank would gain access to Paychex’s nationwide body of clients and a digital payroll platform that could easily be integrated into M&T’s online banking systems. M&T Bank has been slow to pursue ‘fintech’ innovations — this acquisition could put it at the cutting edge among commercial banks.
Paychex would gain access to M&T Bank’s valuable branch network, particularly in the lucrative New York to Washington corridor, where there is much room for growth in its core payroll services business. Being able to locate associates across the branch network would give Paychex deep reach into neighborhoods — particularly in and around New York City — that could position it to dominate across all human resource business lines.
No national payroll processor has a walk-in branch network. No major commercial bank provides a full slate of payroll services. That’s an undeniable competitive advantage across both businesses.
It’s also thought that such a merger will ensure that M&T remains an independent banking institution; that’s no small accomplishment in a market environment that leans heavily towards industry consolidation, and under threat of disruptive new technology. With its new business lines and new revenue streams, a merged M&T-Paychex would be positioned with newfound leverage in future acquisition deals in the traditional banking space. The Bank’s leadership has stated its intention to continue to build towards a national branch network.
Such a merger could be the crowning achievement of Golisano’s spectacular career — one that began with $3,000 and a credit card. Today, Forbes estimates Golisano’s personal net worth at more than $3.4 billion. It would also mark the biggest economic development win for Western New York and the Finger Lakes in generations.
It is unclear how M&T Bank’s new CEO Rene Jones will respond to Golisano’s less than secret flirtations with the concept. It would be seen as a bold move for a new executive, and one that could establish his legacy at the bank early in his tenure.
If the deal does happen, political observers expect that the positive impact on economic confidence would benefit Governor Andrew Cuomo’s bid for a third term. Winning the Western New York and the Finger Lakes vote is a key pillar in his reelection strategy.
Delivering such a pivotal moment for the economic trajectory of Upstate New York — and to do so during a reelection year — would make Howard Zemsky, the State’s economic development czar, the most influential American bureaucrat since the days of Robert Moses.