What price an elearning company? $1.1bn sounded good to us. Oh, don't worry. We haven't been bought. If we had $1.1bn you might find these pages get updated a little less often. But that was the price that a private equity company paid to acquire Skillsoft last week.Why?
First the numbers:
Skillsoft's annual revenues were $328m with an after tax profit of 15%.
It was acquired for $1.1bn, so that is over three time sales, very high in this market.
Why so high?
Josh Bersin outlines 5 reasons:
1) strong financials, the most profitable elearning company and still growing, 16% revenue growth last year
2) strong market presence, brand recognition, thousands of customers and a large market footprint
3) great asset library, many titles that don't age with time and hence are high margin
4) strong technology platform with an extensive API
5) an experienced leadership team
So there you have it. A blueprint for selling your elearning company for $1bn.What's stopping you?
Now what for Skillsoft?
The new owners are unlikely to make drastic changes, since they've bought something that's largely working. But Bersin identifies some possible growth strategies for Skillsoft, which include:
- industry specific content
- expand 'down market'
- acquire few remaining competitors
- enter the LMS market more formally
We watch with interest, as you can imagine. We think with the right strategy, these Skillsoft folks could go far...