It was only five years ago that Vector announced it had acquired Saba Software for approximately $400 million. Now, after growing the company into one of the leading providers of cloud-based talent management software, Vector has announced the finalization of its sale of Saba to Cornerstone OnDemand for $1.295 billion.
Since its inception in 1997, Saba has facilitated and empowered human resources departments to effectively manage the recruiting, securing, developing, and retaining of talented workers with a single cloud-based software solution.
“Saba is both a terrific outcome and an excellent example of Vector’s strategy at work. We started with a distressed credit investment, which ultimately led to a full buyout. We retained a terrific product team, brought in some of our best executives, and expanded Saba’s platform and geographic breadth with two material acquisitions,” said David Fishman, a managing director at Vector Capital.
With the addition of Saba, Cornerstone will expand its reach as well as its capacity to help a larger, more diverse group of clients. Founded in 1999, Cornerstone has offered organizations solutions like comprehensive recruiting, personalized learning, modern training content, as well as development-driven performance management to realize the potential of their talent.
Once combined, the company will have more than 75 million users and serve approximately 7,000 organizations around the world with holistic employee data management and insights.
“Today is a truly exciting day for our teams, our clients, and our industry,” said Adam Miller, CEO and founder of Cornerstone. “Saba and Cornerstone have always shared a passion for people development, and together we can accomplish great things. The additional depth of expertise and capability from Saba is an ideal complement to Cornerstone. With the combination, 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.”
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.
Cornerstone will share detailed financial and operational updates during an expanded first-quarter earnings call on May 11.