Learning Technologies Group PLC chief executive Jonathan Satchell talked with Proactive's Stephen Gunnion about the company’s transition to private ownership following its acquisition by private equity group General Atlantic.
Proactive: Hello, you’re watching Proactive. Joining me is Learning Technologies Group chief executive Jonathan Satchell. Jonathan, very good to speak to you this morning. The company has been given the green light to proceed with its acquisition by General Atlantic. Tell us why, after your very strong growth story over the past eight years, you're now going private.
Jonathan Satchell: Morning, Stephen. Yes, indeed. The business has been on the market since November 2013. In those first eight years, we had an incredible growth trajectory, largely driven by acquisitions and some organic growth. We were well-supported by investors through six equity placings, which were always oversubscribed.
However, the last three years have been more difficult. The environment changed completely due to macroeconomic factors, interest rate changes, and our own business performance issues, though we never faced major difficulties. We went ex-growth, but we still fully deleveraged from a 1.8 times leverage in 2021 to zero today. Despite our profitability and cash generation, the market seemed to fall out of love with us.
Unfortunately, our share price declined significantly, making us an attractive target for private equity. This is not something I would have chosen, but it is the reality we had to navigate.
Proactive: So this isn’t a situation unique to Learning Technologies Group?
Jonathan Satchell: No, not at all. Many companies are leaving the London market. The statistics show a clear trend. However, we were somewhat unique as a buy-and-build story. We openly used the markets to raise capital, doing so six times successfully.
We took our profits from £1.5 million at the time of our IPO to around £100 million in 2022 and 2023. Our share count only increased threefold, yet our EBITDA increased nearly 70 times. That is a remarkable success story. Despite this, the market decided it was no longer for them.
Proactive: You mentioned mixed emotions, yet the company's directors recommended this deal, and shareholders voted for it. Why is this a good deal for them?
Jonathan Satchell: Our share price had been stuck between 70p and 80p for a long time before this bid arrived. The bid offered a substantial premium. When the directors sought independent advice from Goldman Sachs and Numis, they found that returning to an £800 million market cap—equivalent to a £1 per share price—was unlikely.
Independent board members, excluding myself and our chairman, determined that the valuation was fair. Although I was not directly involved in the valuation process, I agree with their assessment.
Proactive: Can you tell us more about General Atlantic and their plans for Learning Technologies?
Jonathan Satchell: General Atlantic is a well-known U.S. private equity fund. This acquisition is through their Atlantic Park structured debt fund. They are particularly interested in our diverse group of assets.
Initially, there will be significant leverage on the business due to the debt used to finance the acquisition. However, we are highly profitable and cash-generative. Over time, divestitures may be made to reduce debt. They also have expertise in AI and technology, areas where I believe we can benefit, particularly given our 70% presence in North America.
Proactive: With the U.S. now making up 70% of your business, how will new policies under President Donald Trump affect Learning Technologies Group?
Jonathan Satchell: Economically, I expect the U.S. to strengthen further. There is significant optimism about Trump’s policies. However, he has also made profound changes, particularly in diversity, equity, and inclusion (DEI).
We had already seen a decline in demand for DEI training, but his recent executive order has directly impacted our $20 million affirmative action planning business. Some clients may still require our services, but it is an evolving situation.
Proactive: Now that you’ve received all clearances for the acquisition, what’s next?
Jonathan Satchell: We are in a transitional phase. The next step is securing court approval for the scheme of arrangement. Originally, we considered completing by the end of February, but logistical challenges have pushed the timeline to the end of March.
March 31st will be the final completion date, with key events unfolding the week before. Our court date is set for March 24th. After that, we will leave the public markets for good.
I have mixed emotions. The public markets were exceptional for our first eight years, providing us with the capital to grow. However, the last three years have been difficult, and the market’s response reflected that.
That said, I hope the London markets regain their confidence. Access to capital is crucial for companies like ours. Private equity would not have enabled our early success in the same way. My message to the market is: Restore confidence, return to the practices that fueled growth, and bring back the investor spirit.