Contact: Scott Denne
Cornerstone OnDemand often promotes its lack of acquisitions as a competitive advantage but now, like its SaaS brethren, it’s showing an increasing appetite for M&A. Today the company inked its second deal with the $42.5m purchase of Evolv.
In fairness to Cornerstone, this deal doesn’t really dent its ‘organic’ messaging – Evolv provides HR analytics tech that will likely be woven throughout Cornerstone’s talent management offerings, rather than bolted on as an additional product. Even so, it’s indicative of a larger trend that a SaaS company that has, until recently, shunned M&A (calling its acquisition-prone competitors ‘Frankensteins’) is now an acquirer.
According to The 451 M&A KnowledgeBase, SaaS vendors have spent $1.54bn so far this year to buy 205 businesses, compared with 175 in all of last year. A single deal – salesforce.com’s $2.5bn reach for ExactTarget – skews last year’s total value of such transactions up to $3.09bn. Backing out that outlier, SaaS companies have already spent twice the money on dealmaking this year than the previous two years combined.
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