A Workday logo appears in this illustration taken August 18, 2025. REUTERS/Dado Ruvic/Illustration

(Reuters) - Workday said on Tuesday it would acquire artificial intelligence firm Sana for about $1.1 billion, as the human resources software provider looks to drive demand by integrating AI capabilities into its products.

The proposed transaction adds to a flurry of deal-making activities in the HR software sector, after private equity firm Thoma Bravo agreed to buy Workday rival Dayforce for $12.3 billion last month.

Shares of Workday were down about 1% in premarket trading.

The transaction is expected to close in the fourth quarter of Workday's fiscal year 2026, ending January 31.

Allen & Company is the financial adviser to Workday.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)