Although a lot of us might be winding down to the big Labor Day weekend, the ongoing consolidation in the HR software space doesn’t stop, as Taleo today announced that it is acquiring learning management provider Learn.com for approximately $125 million in cash.
As with yesterday’s announcement of software maker Kenexa buying compensation specialist Salary.com, the deal highlights the continuing move by software providers toward a broad and integrated talent management platform and away from the “best of breed” approach.
“The official combination of Taleo and Learn.com is part of a growing trend away from the standalone, one-size-fits-all LMS (learning management system),” said Josh Bersin, president of Bersin & Associates. “This acquisition reflects the corporate need for an integrated and comprehensive approach to talent management and learning.”
Learn.com is described in the press release announcing the deal as “a leading next generation provider of SaaS learning management solutions (in) a market estimated to be $1 billion in 2011… Its software enables businesses to more seamlessly develop, deliver and manage education and training to help employees, customers and partners reach their full potential. Learn.com’s social learning and web conferencing features also enable companies to build collaborative learning and knowledge sharing solutions, which are among the fastest growing applications in employee development today.”
The company says its technology solutions are being used by more than 500 global companies of all sizes, and support up to 200,000 users per customer, with about 2 million end users worldwide.
Why this deal makes sense
Josh Bersin thinks this is a smart acquisition for Taleo.
“While Learn.com certainly isn’t the biggest LMS player in the market, the acquisition will add to Taleo’s portfolio a proven learning management solution,” he says “Given Taleo’s technology track record, I predict that Taleo will rapidly add further improvements and integrate the learning platform with its talent management solutions. The ability to offer an end-to-end solution to corporate customers will give Taleo a new competitive advantage.”
Taleo, a company that provides talent acquisition, performance, and compensation management solutions, and Learn.com, have been working together as strategic partners since September 2009. More than 50 companies across a variety of industries have selected the Taleo and Learn.com solutions, including Newell-Rubbermaid, Swift Transportation, and CPS Energy.
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“As businesses transform to ignite growth, they can’t afford to create a knowledge gap between the skills they have in their teams and the skills they need to drive business,” said Michael Gregoire, Chairman and CEO of Taleo. “Learn.com’s social learning and collaborative functionality makes it easier to close that gap. We are pleased to add best-in-class technology, staff and customers from Learn.com to enable enterprises with a total talent management solution to achieve greater performance.”
How Taleo and Kenexa deals are similar
Under the terms of the deal, Taleo (NASDAQ: TLEO) will pay approximately $125 million in cash for all of the outstanding capital stock of Learn.com. The acquisition is expected to be completed prior to the end of the fourth quarter of 2010.
What I wrote yesterday about the Kenexa-Salary.com deal is equally applicable to this one: Although these two acquisitions don’t suggest that the “best of breed” product approach is dead, it does show that smart companies like Kenexa and Taleo see an opportunity to leverage and perhaps up sell their customer base if they can offer a wider variety of software and services across the board.
That’s what this deal is all about. And I will repeat this again: don’t be surprised if you see more of these kinds of deals in the months to come.