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LoD Viewpoints November 2006

SkillSoft buys NETg

Both SkillSoft and NETg are major suppliers of catalog content to businesses and government organizations. Both companies also have numerous partnerships with eLearning-tools companies, resellers, consultants, and system integrators. Skillsoft's acquisition of NETg will create a major eLearning player with few direct competitors. However, the increasing use of user-created content and pressure from Indian suppliers will create tough market conditions for this new company. This Viewpoints analyzes the proposed acquisition and discusses implications for Learning-on-Demand (LoD) clients.

On 25 October 2006, SkillSoft announced that it had signed a definitive agreement to acquire NETg from Thomson Corporation in a deal worth approximately $285 million. SkillSoft will issue about 11.1 million U.S. depository shares and pay $216 million in cash. To finance the deal, SkillSoft is borrowing $180 million from Credit Suisse.

As part of a strategic realignment, Thomson is also selling its other education businesses: e-testing arm Prometric and its publishing business in higher education, careers, and library reference. Significantly, Thomson's new strategic focus is on electronic-workflow solutions for the business and professional markets—arguably a field that could benefit from a strong eLearning provider capable of embedding learning within workflow and business process (see the December 2004 LoD report Learning in Context of Business Processes and Workflows). Thomson either believed that NETg was not up to this challenge or failed to consider the opportunity.

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SkillSoft buys NETg