Nassarius Capital
Long/short equity

Callidus Software: Getting All Dressed Up For The Acquisition Ball

Will Callidus Software be the next prominent cloud-based vendor to get acquired? If so, the Board of Directors is not standing in the way. Recent moves to crush the firm's poison pill, reorganize the C-suite, and place emphasis on profit indicate a speeding up of the process. Our acquisition-based probability model estimates shares are currently undervalued by >30%, with a fair value target of $16.50.

Background

Callidus Software (NASDAQ:CALD) is a leader of cloud-based Sales Performance Management (SPM) services. SPM is an evolving category in the cloud space that is filling a gap between CRM, HCM, ERP, ECM, etc. At the core is Incentive Compensation Management (ICM) which accounts for greater than 90% of Callidus's revenue. In mid-2011,...

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