Why Clearlake Capital Group Is Buying Cornerstone OnDemand (CSOD) For $5.2 Billion

By Amit Chowdhry ● Aug 6, 2021
  • Cornerstone OnDemand, Inc. (NASDAQ: CSOD) announced it has entered into a definitive agreement to be acquired by leading private equity firm Clearlake Capital Group, L.P. for $5.2 billion. These are the details.

Cornerstone OnDemand, Inc. (NASDAQ: CSOD) — a global leader in talent management software — announced it has entered into a definitive agreement to be acquired by leading private equity firm Clearlake Capital Group, L.P. for $5.2 billion. Under the terms of the deal, Clearlake will buy the outstanding shares of Cornerstone common stock for $57.50 per share in cash.

The $57.50 per share purchase price represents a premium of about 31% to Cornerstone’s unaffected closing stock price on June 1, 2021, the last full trading day prior to Clearlake filing a Schedule 13D in connection with the company’s strategic review process and a 40% premium to the company’s unaffected LTM VWAP. 

And upon completion of the transaction, Cornerstone will become a private company with the flexibility and resources to continue to provide market leading, talent management software-as-a-service solutions. Plus Cornerstone will benefit from the operating capabilities, capital support, and sector expertise of Clearlake and their strong track record with software platform investments.

The deal — which was unanimously approved by Cornerstone’s Board of Directors — is not subject to a financing condition and is expected to close in the second half of 2021, subject to customary closing conditions, including the receipt of regulatory approvals and approval by a majority of Cornerstone stockholders. And certain stockholders, including Clearlake, representing 15.65% of the company’s outstanding shares have agreed to vote their shares in favor of the transaction. Upon the completion of the deal, Cornerstone will become a privately held company and shares of Cornerstone common stock will no longer be listed on any public market.

KEY QUOTES:

“Clearlake’s investment reflects their confidence in our talented people, the power of our SaaS solutions and our value proposition for our customers. With this transaction, we plan to continue to pursue new software capabilities that advance our customers’ efforts to optimize workforce agility, transform skill development, deliver personalized, engaging growth experiences, and align their organizations around a shared definition of success. We’re thrilled to welcome Clearlake as a partner that appreciates the impact our SaaS solutions have on the lives of people at work and our customer-centric philosophy as we accelerate our innovation.”

— Phil Saunders, Chief Executive Officer of Cornerstone

“This transaction represents another major milestone in Cornerstone’s amazing journey. As a private company with Clearlake as a partner, Cornerstone will be even better positioned to innovate, to capitalize on our market opportunities and to extend our platform. The added significant strategic flexibility and financial resources will create new opportunities for our employees, provide our clients with more capabilities to empower their people and enable us to help millions more people realize their potential.”

— Adam Miller, Founder and Co-Chairman of the Board

“Today’s announcement is the culmination of a robust strategic review process conducted by the Board over the past several months. This process considered our standalone opportunities and solicited and inbound interest from a significant number of parties, including potential strategic and financial partners. We are very pleased to reach this agreement, which provides our stockholders with compelling, certain cash value and positively reflects the operational and strategic synergies achieved through Cornerstone’s prior acquisition of Saba.”

— Richard Haddrill, Co-Chairman of the Board

“We have long admired Cornerstone’s leading talent management SaaS solutions and the Company’s mission to help customers modernize the learning and development experience for their employees. We believe there is a significant opportunity to strategically position Cornerstone in the market as a leading platform and industry consolidator, and we look forward to partnering with the management team to drive value through both organic growth acceleration and inorganic transformation.”

— Behdad Eghbali, Co-Founder and Managing Partner at Clearlake

“With a compelling suite of market-leading SaaS solutions, and history of product innovation, we believe Cornerstone is well positioned in the growing and rapidly evolving talent management market. We are excited to leverage Clearlake’s O.P.S.® framework to help the Company strengthen its strategic growth plans and accelerate the pace of execution.”

— Prashant Mehrotra, Partner, and Paul Huber, Principal at Clearlake

“We have developed deep admiration and respect for Cornerstone over the years, in particular during our ownership of Saba Software. We are thrilled to support the Company’s outstanding management team and employees to extend Cornerstone’s leadership as the pre-eminent next-generation talent management software platform.” 

— David Fishman, Managing Director and Head of Private Equity, and Andy Fishman, Managing Director at Vector Capital