Cornerstone OnDemand Acquires Saba for $1.4 Billion

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Cornerstone OnDemand will acquire the talent experience solutions provider Saba Software in a cash and stock transaction valued at nearly $1.4 billion.

The acquisition gives Cornerstone an “an expanded reach and ability to help a larger, diverse group of clients realize the potential of their people,” the company said. Once the merger’s completed, Cornerstone will have more than 75 million users at 7,000 employers around the world.

Cornerstone OnDemand will acquire Saba for 'an expanded reach and ability to help a larger, diverse group of clients.' #HR #HRTech @CornerstoneInc @SabaSoftware Click To Tweet

Cornerstone says the combined company will be well-positioned to deliver “a highly differentiated portfolio” of employee development and experience solutions by leveraging existing products and accelerated product development. 

Adam Miller, Cornerstone’s CEO, described Saba as “an ideal complement to Cornerstone.” With the combination, he said, the company’s 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.”

Saba CEO Phil Saunders said the two companies are “a natural fit.” Saunders will act as interim COO of the combined business once the merger is completed.

Over the course of 2020, Cornerstone will integrate the companies’ product portfolios It’s retained management consulting firm AlixPartners to help integrate the two organizations.

The acquisition is especially interesting because of Cornerstone’s recent emphasis on content and data. During November’s third-quarter earnings call, company executives said that focus would set the company apart from its competitors and ensure its continued growth.

CEO Adam Miller said the “immense volume of data” the company’s collected in recent years provides it with the intelligence necessary to develop a winning content strategy, enable better personalization and create more effective machine learning tools.

In January, Cornerstone bought Clustree, a French company with an extensive AI-based skills engine and skills ontology. The engine uses machine learning to help companies match their employees’ skills with specific job roles. The ontology is based on the consolidation of more than 1 billion job skills, across multiple languages, into a library of 53,000 verified skills.

Separately, Cornerstone said fourth-quarter 2019 revenue rose 8.2 percent year-over-year, to $149.6 million. Subscription revenue rose more than 12 percent to $141.7 million. Annual recurring revenue for the full year was $575.0 million, a 12.7 percent increase.

Updated Feb.; 25, 2020, to include Phil Saunders’ post-merger role and 2019 earnings.

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