Cornerstone OnDemand said it will acquire Saba, which makes talent experience software, for nearly $1.4 billion.
Saba is privately held and a portfolio company of Vector Capital. Adam Miller, CEO of Cornerstone, said the addition of Saba will complement the company's learning tools and give it a better portfolio of people development and experience products. "Our product development team is expected to significantly expand, giving us the ability to develop faster, further increase competitive differentiation, and help millions of people around the world to overcome the skills divide," said Miller.
The combined company will have about 7,000 enterprise customers and 75 million users. Saba has software focused on recruiting and onboarding, learning and skill development, coaching and analytics.
On a conference call with analysts, Miller said:
We believe this transaction enables us to build a sustainable business for the long term. We have a shared passion for people development, and will help thousands of organizations and millions of people around the world to overcome the skills divide. To provide a sense of the reach of this combination, a 2019 pro forma entity would have delivered nearly $820 million of ARR and $775 million in subscription revenue. When we first began to evaluate this transaction, we recognize that the time was right to do this deal. The talent management industry has rapidly evolved over the last several years. And as we look ahead to the next wave of industry innovation and took stock of the share size of our global market opportunity, we saw the acquisition of Saba is an excellent way to position Cornerstone for the long-term growth and innovation.
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Cornerstone separately reported fourth quarter revenue of $149.6 million, up 8.2% from a year ago. Most of that revenue was subscription based. Net income for the fourth quarter was $9.4 million, or 15 cents a share. Non-GAAP fourth quarter earnings were 43 cents a share.
For 2019, Cornerstone reported revenue of $576.5 million, up 8.5%, with a net loss of $4.1 million, or 7 cents a share.