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Skillsoft to Acquire SumTotal

The transaction is subject to various conditions, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Act.

August 21, 2014
Related Topics: HR Technology, Talent Management Systems, The Latest, Technology
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The long-running trend of consolidation among the vendors of training software and services struck again Aug. 21 as Skillsoft Corp.announced plans to acquire SumTotal Systems Inc.from Vista Equity Partners. Financial terms were not disclosed.

“We are pleased to support the management team with such a significant and transformational transaction so soon in our tenure together,” said Frank van den Bosch, partner at European private equity firm Charterhouse Capital Partners, which acquired Skillsoft in April 2014.

Skillsoft has a history of innovation and delivery of solutions for its customers worldwide, ranging from global enterprises, government and education to midsize and small businesses, according to a joint release from both companies. The acquisition of SumTotal expands Skillsoft’s portfolio and global reach.

SumTotal provides flexible human resources software to 3,500 customers and 49 million users worldwide including many Fortune 500 companies, the release said. SumTotal’s Talent Expansion software provides personalized learning and HR processes to organizations of all sizes.

Lisa Rowan, vice president of HR, talent and learning research at research firm IDC, said the marriage of the two companies makes sense given Skillsoft's content heft and SumTotal's rich product offering.

"I do think the combination is a good one," said Rowan, adding that the acquisition gives Skillsoft a greater ability to upsell its services. "SumTotal has really come on strong with a lot of good products, and to have all that content [through Skillsoft] is a great thing for the market.”

SkillSoft joined forces with learning technology firm Element K in 2011, while SumTotal acquired training software and services provider GeoLearning Inc. the same year. Terms of those deals were undisclosed.

“We look forward to joining the Skillsoft family,” said SumTotal CEO Hardeep Gulati in the news release. “This acquisition is a pivotal milestone in the 29-year history of SumTotal and a tremendous endorsement of our employees, as well as the differentiated solutions and services that SumTotal provides. I am very excited about the opportunity to provide more value to our customers, who now will benefit from a comprehensive, content-rich HR solution.”

The transaction is subject to various conditions, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Act.

Deutsche Bank Securities Inc. acted as exclusive financial adviser to Skillsoft. Committed financing for the transaction is being provided by Barclays, Credit Suisse, Deutsche Bank and Morgan Stanley. Simpson Thacher & Bartlett acted as legal counsel to Skillsoft. Evercore acted as exclusive financial adviser to Vista. Kirkland & Ellis acted as legal counsel to Vista.

Previous consolidation involving training vendors reflected a trend to marry learning management systems — which allow companies to track employee coursework and certifications — with broader software systems that manage people, experts noted in previous Workforce stories. Doing so enables customers to better tie learning activities to each individual’s career plans and to better connect individual development to larger organizational objectives, they noted.

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