Written exclusively for the IT Training Community at TrainingIndustry.com.
Mergers and Acquisition activity in the IT Training sector was average to quiet in 2007. M&A activity in the broader training industry started out strong, but cooled steadily during the year according to Whitestone Communications who monitors the training industry. IT training acquisitions followed that general trend. In all, there were only five acquisitions of companies with a significant IT training presence and four of the five took place in Q2.
In April, Micor Solutions acquired Productivity Point International (PPI) for an undisclosed sum. A PPI acquisition was no real surprise since there had been a lot going on to indicate that all was not well in the house of Milken. In May, Micor acquired Vidyah, Ltd., PPI's UK partner. Micor was formed in early 2007 by CEO Robert Roe with plans "to provide next generation learning services to an international client base." Micor said it would continue to offer all of PPI's then current services and integrate additional offerings in the future.
Also in May, SkillSoft acquired NETg from Thompson for $270 million, creating a powerhouse elearning company. SkillSoft said that the acquisition provided over 1,000 NETg courses on subjects that were not in SkillSoft's portfolio, giving them a post acquisition library of over 6,000 courses in 19 languages. SkillSoft said it would integrate NETg courses on their SkillPort LMS and SkillSoft courseware on the NETg LMS in the short term, while working to provide a unified LMS for clients in the future.
In addition to its core elearning courseware, NETg also offered other services including ILT, custom consulting, print based content and third party products. At the time of the acquisition SkillSoft indicated they would probably shed some of the lower margin products. They sold NETG press in August and Financial Campus in October. They announced that Wave would wind down in 2008 and they would exit InteractNow in 2009.
Third Force, a UK elearning company acquired Dublin, Ohio based Mindleaders in May for a reported $18 million. MindLeaders has a strong portfolio of IT courses in networking and PC skills, including several certification tracks. ThirdForce is strong in several verticals in the UK, including healthcare, hospitality and government.
ThirdForce CEO and founder Pat McDonagh was the founder of SkillSoft (then SmartForce), and he is building an elearning company with international reach through acquisition. The MindLeader acquisition gives ThirdForce a strong presence in the US Market. Prior acquisitions include Creative Learning Media, The Electric Paper Company and AV Edge.
After a quiet summer, Global Knowledge bought Synergy Professional Services of Dubai in September for an undisclosed amount. Both companies are privately held and no financial information regarding the deal was announced. Global strengthened its hand in EMEA last year with the acquisition of Azlan and the Synergy acquisition gives them a strong presence in the Middle East and Africa. Both companies are certified Cisco and Microsoft learning partners and Synergy offers a full range of certification programs for Cisco, Oracle, Microsoft, Nortel, and International Standard for Information Security.
Synergy has offices in the UAE, Egypt and Saudi Arabia and partnership arrangements through which it provides training in countries where it does not have permanent offices. They operate a large remote lab facility in Dubai Knowledge Village with over $4 million of Cisco gear and the capacity to run over 30 advanced Cisco courses per week.
So what's on tap for M&A in 2008? There's too much fog in the crystal ball to make any firm predictions right now. Sub-prime mortgage woes are causing stock prices to tumble and credit for business buyers to dry up or disappear. We saw a significant slowdown in M&A activity in general beginning in Q3 of 2007 and we could see that trend continue as the prognosticators wring their hands about a looming recession. But remember, economists have predicted twelve of the last seven recessions, so it could turn out to be a banner year before it's over!
