Vector Capital puts Saba Software on the block

Vector Capital is looking for a buyer for Saba Software, a talent management software company, which the firm took private four years ago, three people familiar with the process told Buyouts.

The process is in the early stages and the firm has yet to select a banker, the people said. Vector is planning to appoint a financial adviser next week, they said.

Saba Software, based in Dublin, California, provides cloud-based talent management software, which enables human resource departments to manage recruiting and training of new talent. The company also assists HR in reviews and performance management, compensation planning and succession planning.

The company generated nearly $100 million of annual Ebitda and $300 million in revenue, the sources said.

Vector wants to sell Saba for around $1.2 billion, they said.

The deal would strike a sizable return for Vector, which took Saba Software private for about $300 million in 2015.

During its ownership, Vector completed an add-on to Saba’s platform.

In 2018, Saba acquired Lumesse, a provider of talent acquisition, talent management and learning experience technology in Europe.

The San-Francisco based PE firm first engaged with Saba in 2013 and lent it $40 million out of Vector’s credit strategy. The capital was aimed to help the company move forward after an accounting scandal. Saba had to restate its earnings for four years, from 2008 to 2011, and for the first two quarters of 2012.

The SEC determined that during those four and a half years, Saba’s employees and managers engaged in practices that led to false revenue recognition, according to the SEC’s enforcement document.

Vector Capital is focused on value-oriented investments in technology companies. The firm makes acquisitions of private companies, spinouts of non-core businesses from corporations, leveraged recapitalizations, as well as public-to-private buyouts.

In February 2017, the firm closed its fifth private equity fund, Vector Capital V, at $1.4 billion, exceeding the fund’s $1.2 billion target.

Vector Capital and Saba Software did not return requests for comment.

Action Item: Contact Alex Slusky, managing partner and CIO of Vector Capital, through his LinkedIn.