Halogen Software announced its acquisition by Saba Software for CAD $12.50 per share, representing a 25% premium and a total enterprise value of CAD $230 million. This acquisition aims to enhance Saba's cloud-based talent management solutions and significantly expand its market presence. The deal reflects ongoing consolidation in the HCM software industry, predominantly led by larger enterprises like Workday.

1. TBP was NOT an advisor to this transaction
Saba Software to acquire Halogen Software (TSX:HGN)
Sunil Grover, Managing Partner
sgrover@truebluepartners.com
(669) 231-8770
Deal Financials
Purchase price/share: CAD$12.50
1/23/17 price/share: CAD$10.00
Implied premium: 25%
Implied EV: CAD$230m
EV/LTM Revenue: 2.5x
EV/LTM EBITDA: 53.3x
Transaction Overview
 February 23, 2017 Halogen Software announced that it has entered into a definitive agreement to be acquired by Saba
Software
 Saba and Vector Capital will acquire all the issued and outstanding shares of Halogen for CAD$12.50/share, a
25% premium to its unaffected share price 30-days prior
 Pervez Qureshi, Saba’s current CEO, will remain as CEO of the combined platform and Halogen Executive
Chairman Michael Slaunwhite will reinvest existing shares into, and become the Chairman
 Halogen Software provides mid-market cloud-based talent and performance management solutions
 Saba Software provides similar products and hopes the acquisition will help boost its SaaS offering and re-position it as
a leader of end-to-end talent management solutions
Talent and Employee Management Software Comparables
Values in millions of USD
Saba Software’s Turnaround through Privatization
 Saba had made several acquisitions between 2009-2012 in hopes of developing its cloud offering
 In 2015, Saba made a distressed sale to Vector Capital after it was delisted from the Nasdaq following an accounting
fraud scandal and SEC-negotiated clawbacks of millions of dollars from executives within the company
 One year later, Vector is now helping Saba acquire Halogen, which will nearly double the size of the business, and add
a strong cloud presence
'15-'16 LTM LTM
Enterprise 2016E 2017E 2016E 2017E 2016E 2017E Revenue Gross EBITDA
Company Value Revenue Revenue Revenue Revenue EBITDA EBITDA Growth Margin Margin
Automatic Data Processing, Inc. 44,882.8 12,081.1 12,742.5 3.7x 3.5x 17.0x 16.5x 7% 44% 23%
Workday, Inc. 16,339.9 1,563.0 1,994.7 10.5x 8.2x 120.6x 74.5x 34% 69% -17%
The Ultimate Software Group, Inc. 5,636.8 780.8 968.8 7.2x 5.8x 30.2x 24.0x 26% 62% 9%
Cornerstone OnDemand, Inc. 2,314.7 423.5 481.0 5.5x 4.8x 68.2x 44.3x 25% 68% -8%
Jive Software, Inc. 223.3 202.2 204.0 1.1x 1.1x 13.2x 10.1x 3% 67% 1%
Halogen Software Inc. 163.4 71.9 77.5 2.3x 2.1x 22.3x 17.6x 9% 76% 10%
Enterprise Value /
Date Enterprise LTM LTM
Announced Target Business Description Acquirer Value Revenue EBITDA
2/10/2015 Saba Software, Inc. Saba Software, Inc. provides cloud-based intelligent talent management solution for organizations
to hire, develop, engage, and inspire people worldwide. It offers a set of people cloud applications,
including recruiting, enterprise learning, talent management, and collaboration solutions.
Vector Capital $272 - -
3/20/2012 HumanConcepts,
LLC
HumanConcepts LLC provides software solutions to enterprises to manage organizational changes
of growth, rightsizing, and reorganization. The company offers a suite of organizational planning
solutions in software-as-a-service model.
Saba Software, Inc. $23 2.0x NM
7/20/2011 Pedagogue
Solutions, Inc.
Pedagogue Solutions, Inc. provides assessment solutions primarily for the corporate market. It
offers Pedagogue Assessment Management System, an online assessment management system to
author, administer, deliver, and analyze online knowledge-based tests.
Saba Software, Inc. - - -
7/20/2011 Comartis Group,
Ltd.
Comartis Group, Ltd. Provides cloud-based assessment and talent development solutions and
services in Switzerland and internationally.
Saba Software, Inc. - - -
Enterprise Value /
Spotlight
February 23, 2017

2. TBP was NOT an advisor to this transaction
Vector Capital’s Expertise in Software Turnarounds
 Vector Capital specializes in turning around distressed businesses, a similar case being Corel Corp.
 2003 – Corel Corp., the creators of WordPerfect, is delisted from the Nasdaq and Toronto Stock Exchange after
the dot-com crash and privatized by Vector Capital
 2006– Vector helps Corel acquire WinZip, and on the same day completes its second IPO at $16/share
 2008– Corel faces headwinds from the financial crisis, and begins seeking financial buyers to recapitalize;
Vector’s offer of $11/share is rejected
 2009– By Q1 2009, Corel’s stock price is below $2.50/share; deals with other parties fall though, and they
eventually accept Vector’s updated bid of $4.00/share
 Current– Vector is amid restructuring the business, which has returned more than $300m in dividends
HCM Software Valuations Dropping, Market Consolidating
 Workday has the large enterprise HCM market dominated, and mid-market providers are beginning to consolidate
 Halogen is a stable business with 76% gross margins, and 10% EBITDA margins, but the YoY growth has been slowed
down to around 10%
 Valuations for companies with growth rates less than 25%, despite having stable cashflows, are being left behind by
investors as the segment consolidates, and are becoming prime targets for acquisition
About True Blue Partners, LLC
True Blue Partners is a M&A advisory firm that serves lower mid-market enterprise software companies, and provides its clients with over 20 years
and of investment banking and technology business operations experience. It’s founders have extensive experience on all sides of a deal as a
financial advisor, private investor, and founder operator, which allows for a unique perspective into the challenges and needs that companies face
within the lower mid-market.
Date Enterprise LTM LTM
Announced Target Business Description Acquirer Value Revenue EBITDA
9/6/2016 Workterra LLC Workterra LLC provides a cloud-based human capital management solution. It offers
WORKTERRA HCM, a solution that delivers a personalized experience across recruiting,
onboarding, benefit administration and enrollment, and wellness program management.
CareerBuilder, LLC - - -
5/5/2016 Fairsail Limited Fairsail Limited develops and markets human resources management software. Its products
include Fairsail Recruit that integrates and audits the process of recruitment from specifying job
requirements to make an offer.
The Sage Group plc $70 - -
3/21/2016 Mangrove Software,
Inc.
Mangrove Software, Inc. provides Software as a Service based human capital management
applications and benefits administration services for mid-market and enterprise organizations in
the United States.
Asure Software, Inc. $18 - -
4/30/2015 ClickSoftware
Technologies Ltd.
ClickSoftware Technologies Ltd. provides software products and solutions for workforce
management and service operations. It offers ClickSchedule, which optimizes service scheduling
and routing to enhance workforce productivity.
Francisco Partners
Management LLC;
Francisco Partners
Fund IV LP
$376 3.0x NM
4/13/2015 Talent2
International Ltd.,
Human Resources
Managed Services
Ascender Group develops advanced payroll and learning solutions. The company's products
include a human capital management (HCM) platform, that allows clients to extend and integrate
their existing payroll platforms across the enterprise.
5Value Capital
Partners
(nka:Potentia Capital
Pty Ltd)
- - -
4/6/2014 TrueNorthLogic, LLC TrueNorthLogic, LLC develops and implements Web-based K-12 education human capital
management solutions.
Weld North LLC - - -
9/20/2011 Infinisource, Inc. Infinisource, Inc. provides SaaS-based human capital management (HCM) solutions for small to
medium-size employers.
Accel-KKR LLC - - -
Enterprise Value /
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
EV/Revenue
Valuations in the HCM Software Segment
Halogen Software HCM Software Index
* True Blue Partners founders were the advisors on the Infinisource transaction
*
HCM Software Index includes: JIVE, CSOD, ULTI, SKIL, HGN