Cornerstone OnDemand (NASDAQ: CSOD), one of the biggest providers of human resources (HR) software for enterprises, is being taken off the public markets into private hands, precisely private equity hands. It’s getting sold to private equity firm Clearlake Capital in one of the biggest software deals of this year.

• Clearlake Capital has agreed to buy Cornerstone OnDemand in a deal worth $5.2bn in total. The PE firm will pay $57.50 per share, a 31% premium to Cornerstone’s closing price the day before the deal was notified to the public.

• Before now, Clearlake was already a major Cornerstone shareholder with a stake of 15.7%, so it won’t be paying $5.2bn for Cornerstone but about $3.8bn when excluding the value of its stake and some $1bn in debt that Cornerstone has on its books.

• Clearlake has set the deal such that when it completes acquiring Cornerstone, it’ll immediately sell a minority stake in the company to Vector Capital, a San Francisco-based private equity firm. The exact worth of the minority stake isn’t disclosed.

• Clearlake is one of the biggest private equity firms in the US, with $39bn under management. Over the past year, many PE firms have been flush with cash to chase deals and thus are doing so. Just recently, another PE firm named Thoma Bravo agreed to buy Medallia, a survey software firm, for $6.4bn.

• Cornerstone OnDemand provides software used by businesses to manage their human resources operations. One of the biggest of its kind, it made $741mn in sales in 2020, with Clearlake paying a 7x multiple of that to buy the company, a usual multiple with software deals.

• The acquisition is expected to be completed in the second half of this year.

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