Taleo Corp. to acquire Vurv Technologies for $128M

Vurv Technologies Inc., a privately held personnel management software company, has agreed to be acquired by a publicly traded competitor for $128.8 million in cash and stock.

Taleo Corp. (NASDAQ: TLEO) will buy a company with more than $40 million in revenue during 2007, Vurv CEO and founder Derek Mercer said.

Taleo's revenue in 2007 was $127.9 million, up 32 percent from 2006 when it earned $97 million, according to its annual filing with the Securities and Exchange Commission.

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The combined company will serve more than 3,400 customers around the world, including 48 Fortune 100 companies, and more than 2,800 small and medium-sized businesses, according to a news release. Taleo expects the acquisition to close in the second quarter.

Vurv's chief-level officers will stay for varying lengths of time to help integrate their areas into Taleo before stepping aside, Mercer said.

Second-line executives and below will be incorporated into Taleo's organization, such as Vurv Senior Vice President of Marketing Kevin Marasco, who will become a vice president of Taleo and report to the chief marketing officer.

Vurv's Jacksonville office will be a key North American operations hub for Taleo, including engineering, production and support functions. Elsewhere, Vurv offices in locations where Taleo is also present -- including California, London, Paris and Sydney -- will be closed and employees incorporated into the Taleo offices, Mercer said.

Vurv and Taleo will continue to support the software being used by their customers while the two companies incorporate the best of both, Mercer said. The company will encourage customers to switch when the new product is ready.

Mercer said he reached out to Michael Gregoire, president and CEO of Taleo, several months ago, but it wasn't until the end of 2007 that Gregoire offered to buy Vurv.

Mercer said he wasn't seeking an exit strategy as much as he was pursuing a goal of creating a billion-dollar software company and was aware that Taleo was looking for acquisitions.

"I talked with other CEOs in our space," Mercer said. "I got intrigued by Taleo's ability to execute. As we talked more, they brought up the possibility to be acquired."

A significant portion of the price will be paid in stock, which Mercer said he wanted because he didn't want to simply take cash and no longer have a stake in the company.

"I wanted to be a participant in the upside, and there's a lot of it. I'm not an exit-focused guy," he said, noting that Vurv only sought venture capital financing twice in its history. "It was long-term thinking, not just how can I get a pop of cash for me."