Learning Technologies Group PLC (LON:LTG) has said it is to acquire privately-owned eThink Education for an initial cash consideration of US$20mln.
eThink is a North American company operating in the high-growth open-source learning management systems (LMS) market. The newly acquired company will be integrated into Learning Technologies’ (LTG’s) Open LMS business acquired in April 2020.
The eThink deal follows Learning Technologies' acquisition of eCreators in September 2020 and marks a further step in the group's strategic goal of consolidating the Moodle market – Moodle being the world’s most popular learning management system - building further complementary expertise and geographical reach into Open LMS.
In fiscal 2020 eThink notched up revenue of around US$9.5mln and earnings before interest and tax (EBIT) of US$2.8mln. It has delivered strong and consistent growth in revenue and Learning Technologies believes it is well-positioned to accelerate this through joining the group’s Open LMS business.
Aside from the initial cash consideration of US$20mln, a further US$16mln could become due should the acquired business meet “ambitious incremental revenue growth targets” in each of the years 2021, 2022 and 2023.
The acquisition was funded from LLearning Technologies' cash resources and is expected to immediately enhance earnings.
"eThink is an important addition to further build-out the Open LMS business acquired in April this year and create an industry powerhouse in the high-growth Moodle market. The eThink team has built a strong business delivering high levels of growth and profitability, which we expect to be further enhanced through integration with Open LMS. This year has seen incredible growth for LTG's Moodle capability and it now represents about 20% of the group's recurring software revenue,” said Jonathan Satchell, the chief executive officer (CEO) of Learning Technologies in a statement.
Learning Technologies also announced the acquisition of JCA Solutions, which operates in the e-learning interoperability standards market and will be merged with LTG's Rustici Software business.
George Vilches, JCA's owner and CEO will focus on software products at Rustici. This small bolt-on acquisition further consolidates Rustici's dominant market-leading position in the e-learning standards market, which is strategically important as companies create, distribute, manage and deploy more digital learning content from a wide array of innovative vendors and platforms, Learning Technologies said.