Saba Software Incorporated
Robbins Arroyo LLP: Acquisition of Saba Software, Inc. (SABA) by Vector CapitalMay Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Saba Software, Inc. (OTC: SABA) by private equity firm Vector Capital. On February 10, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Vector Capital will acquire Saba Software. Under the terms of the agreement, Saba Software shareholders will receive $9.00 for each share of Saba Software common stock.
Is the Proposed Acquisition Best for Saba Software and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Saba Software is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $9.00 merger consideration represents a premium of only 2.3% based on Saba Software’s closing price on February 10, 2015. This premium is significantly below the average one-day premium of nearly 48.5% for comparable transactions within the past five years. Further, Saba last traded above the offer price on February 10, 2015, trading as high as $9.10, and has traded as high as $14.50 as recently as November 10, 2014, closing at $14.10 on the same day.
On September 30, 2014, Saba Software released its earnings results for its first quarter 2015, reporting strong quarterly earnings. New cloud bookings grew 84% in the first quarter of fiscal year 2015 as compared to the same quarter 2014. In addition, total cloud bookings grew 15% in the first quarter 2015 as compared to the first quarter of fiscal year 2014. Also, Saba Software reported its Cloud renewal rates were in excess of 90% in its first quarter 2015. Additionally, Saba Software has beat consensus analyst estimates for adjusted EPS and adjusted net income in three out of its past four quarters.
In commenting on these results, Saba President and Chief Executive Officer, Shawn Farshchi, remarked, “Building on the momentum we achieved in fiscal year 2014, Saba delivered another strong quarter with new cloud bookings growing 84% in the first quarter of fiscal year 2015 over the prior year period and 78% on a trailing twelve month basis over the respective prior year period…. Our success validates our belief that we are clearly gaining market share in the talent management industry.”
In light of these facts, Robbins Arroyo LLP is examining Saba Software board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Saba Software shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Saba Software shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.