Vector Capital Officially Sells Saba Software For $1.295 Billion To Cornerstone OnDemand (CSOD)

By Amit Chowdhry ● April 23, 2020

Leading private equity firm Vector Capital has announced the successful sale of cloud-based talent management software company Saba Software to Cornerstone OnDemand, Inc., (Nasdaq: CSOD) for about $1.295 billion.

Launched in 1997 as a pioneer in learning management software, Saba Software is known for enabling human resources departments to effectively manage all aspects of acquiring, developing, and retaining talent through a single cloud-based software. And Saba’s HR suite covers the entire lifecycle of an employee from recruiting, training, reviews, performance management, and succession planning.

Vector Capital had initially invested in the already-delisted Saba through its Credit Strategy in 2013 — which led to taking it private in 2015 as the company faced SEC-imposed deregistration.

Since buying Saba, Vector Capital worked closely with Saba’s management team to develop and execute a long-term strategic plan focused on expanding Saba’s product offering and increasing recurring revenue. Plus Saba completed two transformative acquisitions: Halogen in 2017 and Lumesse in 2018. These acquisitions added performance and recruiting capabilities to Saba’s market leading learning platform and more than doubled its recurring SaaS revenue.

Plus Saba’s financial performance and scale materially improved with significant increases in overall revenue and EBITDA under Vector Capital’s ownership.

William Blair & Company, L.L.C. acted as financial advisor to Saba in this transaction. And Paul Hastings LLP acted as its legal advisor.

Key Quotes:

“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. We thank CEO Phil Saunders, CFO Pete Low, CTO Srini Ogireddy, and the entire Saba team for their tremendous contributions and partnership.”

-David Fishman, Managing Director at Vector Capital

Over the course of our ownership, we oversaw Sabas transformation from a USfocused, onpremise software business to a global, cloudbased system. We achieved these milestones by identifying strategic acquisitions that added performance management and recruiting capabilities and successfully recruiting and retaining worldclass management and product teams.”

Andy Fishman, Managing Director at Vector Capital

Vector Capital has been a terrific partner during a critical period of growth for Saba. I am proud to have worked alongside their talented team for over 13 years across multiple companies. We are grateful and proud of what we have achieved with their support and look forward to our next chapter with Cornerstone.”

-Phil Saunders, President and CEO of Saba

I have worked alongside Vector Capital since Saba completed its acquisition of Halogen back in 2017. After rolling the majority of my Halogen holdings to become a meaningful equity holder in the combined company, I experienced firsthand the significant value and commitment to excellence they bring to their portfolio companies. Their insights and support were invaluable as we successfully united Halogens vision with Sabas.”

-Michael Slaunwhite, Saba’s Chairman and Halogen’s Co-Founder