Image from Cornerstone’s website

Private equity firm Clearlake Capital Group is acquiring cloud-based learning and people development software company Cornerstone OnDemand for about $3.8 billion.

The transaction is expected to close in the second half of the year and has an enterprise value of approximately $5.2 billion.

Cornerstone shareholders will get $57.50 per share in cash, a premium of more than 15% to the stock’s last close

Cornerstone’s chief executive Phil Saunders said: “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 optimise workforce agility, transform skill development, deliver personalised, engaging growth experiences, and align their organisations 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.”

Adam Miller, founder and co-chairman of Cornerstone, added: “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 capitalise 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 realise their potential.”

Richard Haddrill, co-chairman of Cornerstone, commented: “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.”

Behdad Eghbali, co-founder and managing partner at Clearlake, said: “We have long admired Cornerstone’s leading talent management SaaS solutions and the company’s mission to help customers modernise 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.”

Qatalyst Partners and Centerview Partners were financial advisors to Cornerstone, while Morgan Stanley, Rothschild & Co, J.P. Morgan, Goldman Sachs, BofA Securities, Barclays, Jefferies and William Blair advised Clearlake.

Date published: 6 August 2021

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