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:
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Compensation management is highly synergistic with Kenexa’s current
suite of talent acquisition and retention solutions
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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
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Kenexa believes there is a significant opportunity to expand
Salary.com’s adoption in large organizations and on a global basis
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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.
