Light (Image credit pixabay/ColiN00bSaba Software has announced that it will purchase Lumesse for an undisclosed sum. The acquisition brings together two significant companies in the HRM space. This is the final chapter of Hg Capital Trust plc ownership of Lumesse.

It first bought the company in May 2018 and has been looking to exit since January, according to PE News. It saw its value in the company written down in both 2013 and 2016 as the company underperformed. However, according to its portfolio overview on Lumesse the company has seen growth over the last 12 to 18 months in part due to the relaunch of its products.

Phil Saunders, President and CEO Saba Software (Image credit Linkedin)
Phil Saunders, President and CEO Saba Software

Despite its troubles Lumesse has an impressive roster of clients including BMQ, Volkswagen, Puma and Novartis. Its products include talent acquisition, talent management and talent development.

However, how Saba will integrate or merge the product lines or whether it will do at all is not entirely clear. Saba did reveal that it will look to use the “mobile learning, learning content curation and bespoke content expertise” from Lumesse to strengthen its own portfolio.

Phil Saunders, President and CEO of Saba commented: “Today, organizations of all sizes, across the globe are demanding modern experiences in talent development and talent acquisition for their businesses and for their employees. To address that demand, unified HCM solutions have been emerging at a rapid pace, but falling short on both user experience and depth of capabilities. The addition of Lumesse’s talent technology and expertise will enable us to fill a critical and unmet market need, extend and accelerate the delivery of a ‘best in suite’ talent experience more rapidly across the globe, and create more value for our customers, faster.”

What else does Saba get?

The combined company is much larger. Saba instantly gets a significant increase in footprint in Europe. The combined company has 4,700 customers. It also gains a software footprint from Lumesse across 70 countries and more than 60 languages. It may also see Saba appear in the more generic HCM analyst reports rather than just talent management.

How Saba will combine the products from both companies into a coherent strategy will emerge in 2019. Karen Williams, EVP Product Strategy and Customer Success at Saba commented: “Saba and Lumesse together remain committed to ensuring the highest levels of support, product innovation, and value for our customers. Going forward, Saba and Lumesse management teams will work together to not only provide our global customers with more innovation, but an enhanced local support and enablement experience that ensures their success, and helps them deliver even more value to their organizations.”

What does this mean

Lumesse was not doing that well. It attempted to breach the Salesforce market when it launched Talent Objects: Insights in 2015. That product no longer appears on the AppExchange and does not appear to have gained much traction at all.

The original management buyout, backed by Hg Capital for €110 million has clearly not worked. In a press release Hg Capital stated: “The Company will realise estimated cash proceeds of approximately £1.5 million on completion of this transaction.“

What percentage of the total value to the company isn’t known and whether it now picks up a minority investment in Saba is not stated. The majority of the press release was devoted to information around the status of Hg Capital rather than the apparent success or failure of its investment in Lumesse.

Didier Bench, Executive Chairman of Lumesse and operating partner at Hg Capital was bullish though, commenting: “Over that past 20 years, we have built Lumesse into a market leader in talent management and talent acquisition, including talent acquisition technology and consultancy for the RPO industry. Joining forces with Saba gives us the opportunity to deliver that expertise to customers in new ways, in new markets, while working together to innovate even faster, and make an even bigger impact in the market, and around the world.”

Bench was only appointed Executive Chairman in 2015 and helped turn Lumesse to profit in 2016. It does not seem likely that he will stay, now Hg no longer has an investment. This is an investment that Hg will hope to forget. Bench has recovered some of the investment for Hg Capital. Now it is up to Saba to see what they can do with the products. One suspects that Lumesse, as a brand, will cease to exist. If Saba can ingest the company successfully it will grow stronger.

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