Redwood City, California-based Saba will pay Centra shareholders 66.3 cents in cash and Saba stock at a fixed exchange ratio for each Centra share. The transaction works out to be a 1% premium on Centra's closing price on October 5, 2005 of $2.
The deal is expected to close in the third quarter of fiscal 2006 (ended May 31, 2005). It is still subject to majority shareholder approval from both sides; although directors and shareholders who own 12% of Centra and 30% of Saba have already given their blessing.
The merger will create one of the largest companies dedicated to e-learning software and services, with over 1,000 clients (including over 50 of the Fortune 100) and annual revenue in excess of $100m.
Saba said that Centra's corporate online learning and training software will be a complement to its own software for customizing, delivering and tracking Internet-based online employee learning programs and will also help to expand its reach into larger enterprises.
Centra will become a wholly-owned subsidiary of Saba. Neither company commented on possible layoffs. Centra's CEO Leon Navickas is expected to join Saba's board of directors.
Founded in 1997, Saba's software is differentiated from other e-learning product by its analytics module, which measures the effect training has on employee performance. It also provides a Web publishing tool that lets companies craft their own e-learning courses or to modify existing products. Other offerings let employees share and access training information via chat and bulletin boards.
Saba's learning software covers sales and channel readiness, channel certification, customer education, regulatory compliance and corporate universities. The company also provides consulting and hosting services. Clients include Proctor & Gamble and government agencies.
Nervous investors from both sides didn't take kindly to the deal. Centra shares slipped by as much as 10% to $1.80 on Nasdaq following the announcement while Saba shed nearly 3.5% at $3.72.
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