Today Cornerstone signed a definitive agreement to acquire Saba for $1.395 billion. As you know, Saba is one of the pioneers in the creation of the global talent management industry as we know it today. Like Cornerstone, they are focused on developing people and managing talent. Cornerstone believe this move is transformative for the industry, their clients and their people.
"Twenty years ago, this company was founded with a passion for life-long learning and a belief that people could achieve anything if given the right training, tools and opportunities. Our mission was simple but audacious: improve access to education for adults on a global basis. Over the last two decades, we have witnessed multiple market cycles, technological revolutions and global economic transformation, but we never veered from our original goals. Last year, we delivered over 600 million online classes to millions of people in 187 countries. And now, as Cornerstone enters its third decade, we are taking our vision to the next level." said Adam Miller, President and CEO of Corberstone onDemand.
According to Miller, "The combination of Cornerstone and Saba offers three huge benefits, amongst many others:"
"Innovation: The combination provides us with the resources to substantially accelerate our innovation and product development. Our R&D personnel will increase dramatically, which will enable us to simultaneously increase our competitive differentiation and effectively respond to our clients’ needs. More users also mean more data to feed into our machine learning platform to drive even better AI-based personalization and insights for our clients. Our expanded technology team, with our substantial domain experience, will allow for more rapid innovation and accelerated delivery of our product roadmap across Cornerstone Learning, Performance, Recruiting and HR. In addition, we plan to release two new products this year to help our clients address the skills divide, Cornerstone Careers and Cornerstone Skills, which will leverage the bigger engineering team from this combination and the skills engine we acquired with Clustree.
Greater Reach: The acquisition greatly increases the size of both our client base and our user base. The combined company will have more software developers, more talent specialists, and more expertise to support an expanded client community of over 75M users and approximately 7,000 organizations of all sizes around the globe. This will enable stronger partnerships with content providers, system integrators, and technology leaders worldwide. It will also allow us to augment our service and support operations, accelerate our move to the public cloud, and grow our HR partner ecosystem. We also expect to rapidly augment our expertly curated Content Anytime subscriptions with more languages, more subjects, more partners and more Cornerstone Originals.
Cash Flow: Given the substantial cost synergies available with the combination, we expect to considerably increase our free cash flow. We believe that sizable cash flows will allow us to continue to invest in state-of-the-art solutions to optimize people development, rapidly de-lever the debt related to the transaction, and drive real value for our clients and shareholders."
Cornerstone expect the transaction to close in the second quarter of 2020. Stay tuned for more news on this breaking development.
