Research Update: Cornerstone OnDemand Inc. Downgraded To 'B-' On Leveraged Buyout Acquisition; Outlook Stable

Talent management software provider Cornerstone OnDemand Inc. announced it has entered into a definitive agreement to be acquired by financial sponsor Clearlake Capital Group for about $5.2 billion. The transaction will be funded by a new $300 million revolving credit facility, $2.1 billion first-lien term loan, $770 million second-lien term loan, $700 million preferred equity, and $1.9 billion common equity. We lowered our issuer credit rating on Cornerstone to 'B-' from 'B+' because of the increase in leverage. We assigned our 'B-' issue-level and '3' recovery ratings to Cornerstone's $300 million revolving credit facility and $2.1 billion first-lien term loan. We also assigned our 'CCC+' issue-level and '5' recovery ratings to its $770 second-lien term loan. The stable outlook reflects

...- Talent management software provider Cornerstone OnDemand Inc. announced it has entered into a definitive agreement to be acquired by financial sponsor Clearlake Capital Group for about $5.2 billion. - The transaction will be funded by a new $300 million revolving credit facility, $2.1 billion first-lien term loan, $770 million second-lien term loan, $700 million preferred equity, and $1.9 billion common equity. - We lowered our issuer credit rating on Cornerstone to 'B-' from 'B+' because of the increase in leverage. - We assigned our 'B-' issue-level and '3' recovery ratings to Cornerstone's $300 million revolving credit facility and $2.1 billion first-lien term loan. We also assigned our '###+' issue-level and '5' recovery ratings to its $770 second-lien term loan. - The stable outlook reflects our expectation that while Cornerstone's leverage will be high following the transaction and the potential for business disruptions will be elevated because of its multiple actioned cost savings...

Research Update