Acquisition Accelerates Cornerstone’s Strategy to Penetrate the Small Business Market
• Company capitalizes on disruption in talent management market caused by recent consolidation
• Products to remain separate, preserving Cornerstone’s 100% organically developed solutions for enterprise and mid-size clients
• Sonar’s cloud-based talent management solution to be rebranded as a Cornerstone solution specifically for small businesses
SANTA MONICA, Calif, March 9, 2012 – Cornerstone OnDemand (NASDAQ:CSOD), a global leader in cloud-based talent management solutions, today announced that the company has entered into an agreement to acquire privately held Sonar Limited (“Sonar6”). Based in Auckland, New Zealand, Sonar6 is a leading provider of cloud-based talent management solutions serving small businesses globally. The acquisition will combine two of the talent management industry’s most innovative providers and allows Cornerstone to strengthen its ability to serve customers of all sizes. Additionally, Cornerstone expects that the acquisition will accelerate the Company’s momentum in the small business (SMB) market.
Following the acquisition, Cornerstone will be rebranded as a Cornerstone solution specifically for organizations having fewer than 500 employees. The companies will not integrate their products and Sonar6 solutions will remain separate to preserve Cornerstone’s 100% organically developed solution for enterprise and mid-size clients.
Sonar6 will bring more than 375 global clients to Cornerstone. Cornerstone will continue to operate Sonar6 in Auckland, and Sonar6 employees are expected to remain in their current roles after the transaction closes. Sonar6 CEO Michael Carden will be appointed to Cornerstone’s newly-created position of Vice President of Small Business Operations. In addition, co-founder Mark Hellier will continue his role driving innovation as Head of Products for Small Business.
“The recent consolidation in the talent management space has disrupted the market and created many opportunities for Cornerstone,” said Adam Miller, president and CEO of Cornerstone OnDemand. “ERP vendors are now engrossed with integrating disparate enterprise systems, and we saw a clear opening to accelerate our strategy and penetrate the SMB market. Sonar6 has built a reputation as the leading talent management solution for small businesses. Together, we plan to expand Cornerstone’s global market opportunity.”
Sonar6 is renowned in the talent management industry for its distinct ability to engage employees with its highly interactive technology. Like Cornerstone, Sonar6 offers a completely organic, cloud-based solution. Sonar6's innovative, graphical approach to talent management has won numerous accolades, including Gartner’s “Cool Vendors” and HR Executive magazine's list of “Top Ten HR Products.”
“Cornerstone OnDemand and Sonar6 share a vision for empowering employees and creating an engaged workforce,” said Michael Carden. “We are extremely excited about joining the Cornerstone team.”
Under the terms of the share purchase agreement and subject to certain purchase price adjustments described therein, Cornerstone will pay approximately $13 million in cash and $1 million in equity for Sonar6 and enter into employment agreements with certain employees. Cornerstone does not expect that this transaction will have a material financial impact on its results of operations in 2012. Cornerstone management plans to discuss additional details regarding this transaction on the Company’s first quarter 2012 earnings conference call.
Cornerstone expects to complete the transaction within 45 days, subject to certain closing conditions. For more information about Cornerstone OnDemand, visit www.cornerstoneondemand.com
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