Taleo Corp. (TLEO) filed Quarterly Report for the period ended 2009-09-30.
Taleo Corporation delivers on demand talent management solutions that enable organizations of all sizes to recruit assess and manage their workforces for improved business performance. It's customers use its suite of solutions to improve their talent management processes to reduce the time and costs associated with these processes and to enhance the quality productivity and satisfaction of their workforces. Taleo Corp. has a market cap of $674.6 million; its shares were traded at around $21.36 with a P/E ratio of 79.1 and P/S ratio of 4.
Highlight of Business Operations:
On September 14, 2009, we entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) to acquire Worldwide Compensation, Inc. (“WWC”), a private company with headquarters in California that provides compensation management solutions. In accordance with the terms of the Merger Agreement, we will pay up to $16 million in cash, subject to adjustment for any outstanding debt, third-party expenses and certain other specified items, in exchange for all of the issued and outstanding capital stock, options and warrants of WWC that we do not already own. Fifteen percent (15%) of the consideration will be placed into escrow for one year following the closing to be held as security for losses incurred by us in the event of certain breaches of the representations and warranties contained in the Merger Agreement or certain other events. The acquisition has been approved by both companies boards of directors and is subject to customary closing conditions. The Merger Agreement provides that the closing of the acquisition shall not occur before January 1, 2010. The Merger Agreement contains certain termination rights for both us and WWC. Previously, in the third quarter of 2008, we made an initial investment of $2.5 million for a 16% equity investment in and an option to purchase WWC at a later date. In connection with the execution of the Merger Agreement, we negotiated more favorable terms than the purchase option and also terminated the purchase option. Accordingly, we wrote-off the $1.1 million carrying value of the purchase option in the third quarter of 2009.
Application revenue increased due to successful renewals of existing customers, sales to new customers, sales of additional applications and broader roll out of our applications by existing customers, and the addition of customers through our acquisition of Vurv on July 1, 2008. Application revenue from our products for larger more complex organizations increased by $6.9 million and $26.3 million for the three and nine months ended September 30, 2009, respectively. Application revenue from small business product lines increased by $0.5 million and $4.3 million for the three and nine months ended September 30, 2009, respectively. Application product revenue for the nine months ended September 30, 2009 includes legacy Vurv customer revenue for the entire period. Application product revenue for the nine months ended September 30, 2008 includes legacy Vurv customer revenue only after the acquisition date of July 1, 2008. The difference
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