WAYNE, Pa. & Needham, MA – September 1, 2010 – Kenexa Corporation
(Nasdaq: KNXA) and Salary.com, Inc. (Nasdaq: SLRY) today announced that they
have entered into an agreement for Kenexa’s acquisition of Salary.com in an all
cash tender offer and merger for $4.07 per share, or approximately $80 million.
Kenexa, a global provider of business solutions for human resources, expects to
complete the cash tender offer and close the transaction during the fourth
quarter of 2010. The completion of the transaction is subject to a majority of
the outstanding Salary.com shares being tendered, as well as satisfactory
completion of other customary closing conditions, including certain regulatory
approvals.
Kenexa expects to finance the deal through a combination of its cash balances
and borrowings against its credit facility, which was recently put in place.
The agreement has been unanimously approved by the board of directors of both
companies, and Salary.com’s board intends to recommend that the Salary.com
stockholders tender their shares in the offer.
Kenexa’s Chief Executive Officer, Rudy Karsan, stated, “We are very excited
to announce the acquisition of Salary.com, which provides Kenexa with
significant domain expertise and a strong leadership position in the area of
on-demand compensation management solutions. Salary.com’s value proposition
spans both software and proprietary content, similar to Kenexa, and their
compensation management solutions are highly synergistic with our broad suite of
talent acquisition and retention solutions. We believe Kenexa is increasingly
being recognized in the market place as having the broadest and deepest suite of
talent management solutions, and the addition of Salary.com’s solutions and
customer base will further strengthen our competitive position.”
Karsan added, “We believe there is a tremendous opportunity to take
Salary.com’s best-in-class compensation management solutions to Kenexa’s
customer base, which includes some of the largest corporations in the world. In
addition, Salary.com has several thousand customers that provide a fertile
opportunity for Kenexa to deliver our suite of software, services and content.
We believe Salary.com’s acquisition by Kenexa is a major positive for both of
our respective companies, employees, partners, customers and prospects.”
Salary.com provides on-demand compensation software that helps businesses and
individuals manage pay and performance. The company is the industry leader in
market pricing and compensation analysis software that helps customers
benchmark, compensate and reward its employees. Salary.com’s compensation
solutions were designed by Certified Compensation Professionals (CCP®) and
enable corporations to analyze pay competitiveness, simplify cumbersome survey
participation and automate market pricing all in a single, web-based solution.
Salary.com also provides companies with access to a wealth of employer reported
compensation data that spans thousands of jobs.
Kenexa believes the acquisition of Salary.com is compelling for a number of
reasons, including the following:
• Compensation management is highly synergistic with Kenexa’s current suite
of talent acquisition and retention solutions
• Salary.com has established a
market leadership position in the on-demand, compensation management
market
• Salary.com and Kenexa have complementary business models as both
companies deliver a combination of software and proprietary content through a
subscription-based, on-demand model
• Kenexa believes there is a significant
opportunity to expand Salary.com’s adoption in large organizations and on a
global basis
• Kenexa expects the transaction will have a positive impact on
its non-GAAP operating results
Kenexa’s management will provide additional, updated financial guidance that
includes the expected contribution from Salary.com on its third quarter 2010
financial results conference call, assuming the acquisition has closed in
advance.
Upon completion of the Salary.com acquisition, Kenexa’s
non-GAAP results will exclude stock-based compensation expense and amortization
of intangibles associated with acquisitions as they have in the past, in
addition to non-recurring professional fees associated with completing the
transaction and the purchase accounting reduction to Salary.com’s deferred
revenue.
Salary.com’s interim chief executive officer, Paul Daoust, said,
“Over the last several quarters, Salary.com has executed an aggressive
restructuring plan to enable the company to focus on our core businesses and
areas of competitive advantage. We believe Salary.com’s acquisition by Kenexa
will enable us to capitalize on our market leading software and data in
compensation, talent management and consumer offerings. Salary.com will now
have access to a much larger global sales and services organization, greater
R&D resources and overall financial strength to provide our customers with
confidence that we will be able to meet their needs from a long-term
perspective. We believe that the combination of Salary.com and Kenexa will
provide a unique, end-to-end value proposition that positions our combined
organization very well in front of an eventual improvement in the economy and
hiring environment.”
Reiterates Financial Guidance for the Third
Quarter 2010
On September 1, 2010, Kenexa’s management reiterated that the Company is on
track to meet the financial guidance it previously issued on August 3, 2010.
The Company continues to expect revenue to be $45 million to $47 million, and
non-GAAP operating income to be $3.4 million to $3.6 million. Assuming an
effective tax rate for reporting purposes of approximately 20% and approximately
23.2 million shares outstanding, Kenexa expects its non-GAAP net income per
diluted share to be $0.12 to $0.13.
Conference Call Information
Kenexa will host a conference call
today, September 1, 2010, at 8:00am (Eastern Time) to discuss the acquisition.
To access this call, dial 877-407-9039 (domestic) or 201-689-8470
(international). A replay of this conference call will be available through
September 8, 2010, at 877-660-6853 (domestic) or 201-612-7415 (international).
The replay account number is 3055 and the passcode is 356459. A live webcast of
this conference call will be available on the "Investor Relations" page of the
Company's Web site, (www.kenexa.com) by
visiting: http://phx.corporate-ir.net/playerlink.zhtml?c=189766&s=wm&e=3339590 and
a replay will be archived on the Web site as well, this can be viewed by
visiting http://phx.corporate-ir.net/playerlink.zhtml?c=189766&s=wm&e=3339590
Special Note
The planned tender offer described in
this release has not yet commenced. This press release is for informational
purposes only and is not an offer to purchase or a solicitation of an offer to
sell securities. At the time the planned tender offer is commenced, Kenexa will
file a tender offer statement on Schedule TO with the Securities and Exchange
Commission (the "SEC"), and Salary.com will file a solicitation/recommendation
statement on Schedule 14D-9 with respect to the planned tender offer. The
tender offer statement (including an offer to purchase, a related letter of
transmittal and other tender offer documents) and the
solicitation/recommendation statement will contain important information that
should be read carefully before making any decision to tender securities in the
planned tender offer. Those materials will be made available to Salary.com’s
stockholders at no expense to them. In addition, all of those materials (and all
other tender offer documents filed with the SEC) will be made available at no
charge on the SEC's website: www.sec.gov.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934 that are
not limited to historical facts, but reflect Kenexa’s and Salary.com’s current
beliefs, expectations or intentions regarding future events. No assurance can be
given that the acquisition of Salary.com by Kenexa will be completed, that
completion will not be delayed, or that Kenexa will realize the anticipated
benefits of the transaction. Risks could include the parties’ expectations with
respect to the synergies, costs and other anticipated financial impacts of the
proposed transaction; future financial and operating results of Kenexa and
Salary.com; the plans, objectives, expectations and intentions with respect to
future operations and services of Kenexa and Salary.com; any necessary approval
of the proposed transaction by stockholders and by governmental regulatory
authorities; the satisfaction of the closing conditions to the proposed
transaction; the timing of the completion of the proposed transaction; the
possibility that the proposed transaction is delayed or does not close,
including due to the failure to receive any required stockholder or regulatory
approvals, the taking of governmental action (including the passage of
legislation) to block the transaction, or the failure of other closing
conditions; the possibility that the expected synergies will not be realized, or
will not be realized within the expected time period; the impact of labor
relations, global economic conditions, competitive actions taken by other
companies, natural disasters, difficulties in integrating the two companies, or
regulatory matters. Kenexa and Salary.com caution that the foregoing list of
factors is not exclusive. Additional information concerning these and other risk
factors is contained in Kenexa’s and Salary.com’s most recently filed annual
reports on Form 10-K, subsequent quarterly reports on Form 10-Q, recent current
reports on Form 8-K, and other SEC filings. All subsequent written and oral
forward-looking statements concerning Kenexa, Salary.com, the proposed
transaction or other matters and attributable to Kenexa or Salary.com or any
person acting on their behalf are expressly qualified in their entirety by the
cautionary statements above. Neither Kenexa nor Salary.com undertakes any
obligation to publicly update any of these forward-looking statements to reflect
events or circumstances that may arise after the date hereof.
About Kenexa
Kenexa® provides business solutions for human
resources. We help global organizations multiply business success by identifying
the best individuals for every job and fostering optimal work environments for
every organization. For more than 20 years, Kenexa has studied human behavior
and team dynamics in the workplace, and has developed the software solutions,
business processes and expert consulting that help organizations impact positive
business outcomes through HR. Kenexa is the only company that offers a
comprehensive suite of unified products and services that support the entire
employee lifecycle from pre-hire to exit. Additional information about Kenexa
and its global products and services can be accessed at www.kenexa.com.
About Salary.com
Salary.com is a leading provider of on-demand compensation and talent
management solutions. Salary.com's highly configurable software applications and
proprietary content help executives, line managers and compensation
professionals automate, streamline and optimize critical talent management
processes including: market pricing, compensation planning, performance
management, competency management, and succession planning. Built with
compensation and competency data at the core, Salary.com solutions provide
businesses of all sizes with the most productive and cost-effective way to
manage and inspire their most important asset -- their people. For more
information, visit www.Salary.com.
# # #
Note to editors: Kenexa is a registered trademark of Kenexa. Other
company names, product names and company logos mentioned herein are the
trademarks or registered trademarks of their respective owners.
Contact
MEDIA CONTACT:
Jennifer Meyer
Kenexa
(612)
332-6383
jennifer.meyer@kenexa.com
Jeanne Achille
The Devon Group
(732) 224-1000, ext. 11
jeanne@devonpr.com
INVESTOR CONTACT:
Kori Doherty
ICR
(617) 956-6730
kdoherty@icrinc.com
