Reiterates financial guidance for the third quarter 2010
HRchitect featured Kenexa in our May 2008 release of The Suite Life of Integrated Talent Management and also includes them in our list of top Talent Acquisition Systems and top Talent Management Systems vendors that businesses should consider. Ron Hanscome, VP of Product Strategy with Kenexa appeared on the HRchitect WebMingle on June 26, 2009 and Derek Bluestone, VP Product Marketing appeared on June 17, 2010. If you are looking for a new Talent Management System, or any HR system, talk to HRchitect first. We have unparalleled knowledge of the HR and Talent Management vendor community and can save you time and money in selection and implementation. Simply put, do not invest in any kind of HR technology without consulting with the experts first. HRchitect is here to help!
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.
For more information on Kenexa, please visit www.kenexa.com
Matt Lafata, HRchitect
