Element K has been under pressure from course catalog rivals SkillSoft and Thomson NETg, consulting giants Accenture and IBM, and regional custom-training content providers, Bersin says. SkillSoft and Thomson NETg are bigger than Element K, and the courseware products each offers are becoming similar, he says. Courseware refers to software programs designed to teach various topics, such as a computer programming language or leadership skills.

"Element K was facing limited growth prospects," Bersin says. "No. 3 in a commoditizing industry is a difficult place to be."

David Snider, director of corporate marketing at Element K, agreed it is hard to grow in the catalog business, which refers to off-the-shelf courses. But he says the company in recent years has been focusing more on comprehensive learning products and services as well as training outsourcing. He declined to specify Element K’s revenue growth, but said revenue has been increasing in the high single digits and low double digits. Factors behind the merger include complementary geographic locations and services, according to Snider. "We’re able to reach more customers," he says.

Element K employs more than 700 people. Together, NIIT and Element K will have more than 3,000 employees, more than $250 million in revenue and a presence in 32 countries, the firms said in a statement.

The total market for learning management software systems, custom-developed online training materials, e-learning-related services and electronic courses found in catalogs is about $13 billion annually, according to Bersin & Associates. The firm predicts it will grow 8 percent to 12 percent this year.

Despite widespread disappointment with the return on e-learning investments a few years ago, companies are now delivering 20 percent to 30 percent of their corporate training content through computers, up from about 5 percent five years ago, Bersin says.

Founded in 1981, NIIT says it has trained one out of every three software professionals in India. Its services include instructor-led and online learning, custom content development and outsourcing. In 2003, NIIT acquired CognitiveArts, based in Evanston, Illinois. It provides learning outsourcing services and creates custom training content.

NIIT announced the Element K acquisition in late July. The deal is expected to close by the middle of this month. "This acquisition is consistent with our stated plans for accelerated growth in developed economies," NIIT chief executive Vijay Thadani said in a statement. "Element K has an established base of highly satisfied clients in the United States and Canada, and a well-respected brand in the training industry."

The combination of companies should help businesses, argues Doug Harward, chief executive of TrainingOutsourcing.com, an organization that aims to bring corporate executives and training suppliers together.

In a review of the deal, Harward wrote that it gives customers "another choice when an international player is needed. It positions the collective NIIT-Element K Company as a new player who is truly international and can compete with the Top 5 training companies in the world."

—Ed Frauenheim