Kenexa Corporation (Nasdaq: KNXA) and Salary.com, Inc. (Nasdaq:
SLRY) today announced that they have entered into an agreement for
Kenexa’s acquisition of Salary.com in an all cash tender offer and
merger for $4.07 per share, or approximately $80 million. Kenexa, a
global provider of business solutions for human resources, expects
to complete the cash tender offer and close the transaction during
the fourth quarter of 2010. The completion of the transaction is
subject to a majority of the outstanding Salary.com shares being
tendered, as well as satisfactory completion of other customary
closing conditions, including certain regulatory approvals.
Kenexa expects to finance the deal through a combination of its
cash balances and borrowings against its credit facility, which was
recently put in place. The agreement has been unanimously approved
by the board of directors of both companies, and Salary.com’s board
intends to recommend that the Salary.com stockholders tender their
shares in the offer.
Kenexa’s Chief Executive Officer, Rudy Karsan, stated, “We are
very excited to announce the acquisition of Salary.com, which
provides Kenexa with significant domain expertise and a strong
leadership position in the area of on-demand compensation
management solutions. Salary.com’s value proposition spans both
software and proprietary content, similar to Kenexa, and their
compensation management solutions are highly synergistic with our
broad suite of talent acquisition and retention solutions. We
believe Kenexa is increasingly being recognized in the market place
as having the broadest and deepest suite of talent management
solutions, and the addition of Salary.com’s solutions and customer
base will further strengthen our competitive position.”
Karsan added, “We believe there is a tremendous opportunity to
take Salary.com’s best-in-class compensation management solutions
to Kenexa’s customer base, which includes some of the largest
corporations in the world. In addition, Salary.com has several
thousand customers that provide a fertile opportunity for Kenexa to
deliver our suite of software, services and content. We believe
Salary.com’s acquisition by Kenexa is a major positive for both of
our respective companies, employees, partners, customers and
prospects.”
Salary.com provides on-demand compensation software that helps
businesses and individuals manage pay and performance. The company
is the industry leader in market pricing and compensation analysis
software that helps customers benchmark, compensate and reward its
employees. Salary.com’s compensation solutions were designed by
Certified Compensation Professionals (CCP®) and enable corporations
to analyze pay competitiveness, simplify cumbersome survey
participation and automate market pricing all in a single,
web-based solution. Salary.com also provides companies with access
to a wealth of employer reported compensation data that spans
thousands of jobs.
Kenexa believes the acquisition of Salary.com is compelling for
a number of reasons, including the following:
- Compensation management is
highly synergistic with Kenexa’s current suite of talent
acquisition and retention solutions
- Salary.com has established a
market leadership position in the on-demand, compensation
management market
- Salary.com and Kenexa have
complementary business models as both companies deliver a
combination of software and proprietary content through a
subscription-based, on-demand model
- Kenexa believes there is a
significant opportunity to expand Salary.com’s adoption in large
organizations and on a global basis
- Kenexa expects the transaction
will have a positive impact on its non-GAAP operating results
Kenexa’s management will provide additional, updated financial
guidance that includes the expected contribution from Salary.com on
its third quarter 2010 financial results conference call, assuming
the acquisition has closed in advance.
Upon completion of the Salary.com acquisition, Kenexa’s non-GAAP
results will exclude stock-based compensation expense and
amortization of intangibles associated with acquisitions as they
have in the past, in addition to non-recurring professional fees
associated with completing the transaction and the purchase
accounting reduction to Salary.com’s deferred revenue.
Salary.com’s interim chief executive officer, Paul Daoust, said,
“Over the last several quarters, Salary.com has executed an
aggressive restructuring plan to enable the company to focus on our
core businesses and areas of competitive advantage. We believe
Salary.com’s acquisition by Kenexa will enable us to capitalize on
our market leading software and data in compensation, talent
management and consumer offerings. Salary.com will now have access
to a much larger global sales and services organization, greater
R&D resources and overall financial strength to provide our
customers with confidence that we will be able to meet their needs
from a long-term perspective. We believe that the combination of
Salary.com and Kenexa will provide a unique, end-to-end value
proposition that positions our combined organization very well in
front of an eventual improvement in the economy and hiring
environment.”
Reiterates Financial Guidance for the Third Quarter
2010
On September 1, 2010, Kenexa’s management reiterated that the
Company is on track to meet the financial guidance it previously
issued on August 3, 2010. The Company continues to expect revenue
to be $45 million to $47 million, and non-GAAP operating income to
be $3.4 million to $3.6 million. Assuming an effective tax rate for
reporting purposes of approximately 20% and approximately 23.2
million shares outstanding, Kenexa expects its non-GAAP net income
per diluted share to be $0.12 to $0.13.
Conference Call Information
Kenexa will host a conference call today, September 1, 2010, at
8:00am (Eastern Time) to discuss the acquisition. To access this
call, dial 877-407-9039 (domestic) or 201-689-8470 (international).
A replay of this conference call will be available through
September 8, 2010, at 877-660-6853 (domestic) or 201-612-7415
(international). The replay account number is 3055 and the passcode
is 356459. A live webcast of this conference call will be available
on the "Investor Relations" page of the Company's Web site,
(www.kenexa.com) and a replay will be archived on the Web site as
well.
Special Note
The planned tender offer described in this release has not yet
commenced. This press release is for informational purposes only
and is not an offer to purchase or a solicitation of an offer to
sell securities. At the time the planned tender offer is commenced,
Kenexa will file a tender offer statement on Schedule TO with the
Securities and Exchange Commission (the "SEC"), and Salary.com will
file a solicitation/recommendation statement on Schedule 14D-9 with
respect to the planned tender offer. The tender offer statement
(including an offer to purchase, a related letter of transmittal
and other tender offer documents) and the
solicitation/recommendation statement will contain important
information that should be read carefully before making any
decision to tender securities in the planned tender offer. Those
materials will be made available to Salary.com’s stockholders at no
expense to them. In addition, all of those materials (and all other
tender offer documents filed with the SEC) will be made available
at no charge on the SEC's website: www.sec.gov.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934 that are not limited to historical facts, but
reflect Kenexa’s and Salary.com’s current beliefs, expectations or
intentions regarding future events. No assurance can be given that
the acquisition of Salary.com by Kenexa will be completed, that
completion will not be delayed, or that Kenexa will realize the
anticipated benefits of the transaction. Risks could include the
parties’ expectations with respect to the synergies, costs and
other anticipated financial impacts of the proposed transaction;
future financial and operating results of Kenexa and Salary.com;
the plans, objectives, expectations and intentions with respect to
future operations and services of Kenexa and Salary.com; any
necessary approval of the proposed transaction by stockholders and
by governmental regulatory authorities; the satisfaction of the
closing conditions to the proposed transaction; the timing of the
completion of the proposed transaction; the possibility that the
proposed transaction is delayed or does not close, including due to
the failure to receive any required stockholder or regulatory
approvals, the taking of governmental action (including the passage
of legislation) to block the transaction, or the failure of other
closing conditions; the possibility that the expected synergies
will not be realized, or will not be realized within the expected
time period; the impact of labor relations, global economic
conditions, competitive actions taken by other companies, natural
disasters, difficulties in integrating the two companies, or
regulatory matters. Kenexa and Salary.com caution that the
foregoing list of factors is not exclusive. Additional information
concerning these and other risk factors is contained in Kenexa’s
and Salary.com’s most recently filed annual reports on Form 10-K,
subsequent quarterly reports on Form 10-Q, recent current reports
on Form 8-K, and other SEC filings. All subsequent written and oral
forward-looking statements concerning Kenexa, Salary.com, the
proposed transaction or other matters and attributable to Kenexa or
Salary.com or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above.
Neither Kenexa nor Salary.com undertakes any obligation to publicly
update any of these forward-looking statements to reflect events or
circumstances that may arise after the date hereof.
About Kenexa
Kenexa® provides business solutions for human resources. We help
global organizations multiply business success by identifying the
best individuals for every job and fostering optimal work
environments for every organization. For more than 20 years, Kenexa
has studied human behavior and team dynamics in the workplace, and
has developed the software solutions, business processes and expert
consulting that help organizations impact positive business
outcomes through HR. Kenexa is the only company that offers a
comprehensive suite of unified products and services that support
the entire employee lifecycle from pre-hire to exit. Additional
information about Kenexa and its global products and services can
be accessed at www.kenexa.com.
About Salary.com
Salary.com is a leading provider of on-demand compensation and
talent management solutions. Salary.com's highly configurable
software applications and proprietary content help executives, line
managers and compensation professionals automate, streamline and
optimize critical talent management processes including: market
pricing, compensation planning, performance management, competency
management, and succession planning. Built with compensation and
competency data at the core, Salary.com solutions provide
businesses of all sizes with the most productive and cost-effective
way to manage and inspire their most important asset -- their
people. For more information, visit www.Salary.com.
Note to editors: Kenexa is a registered trademark of Kenexa.
Other company names, product names and company logos mentioned
herein are the trademarks or registered trademarks of their
respective owners.
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