NIIT sells Element K for $110 m to SkillSoft
NIIT Ltd has sold its entire stake in US-based Element K Corporation to SkillSoft Ltd for $110 million.
Element K is into learning products and solutions and its portfolio includes e-learning content, virtual labs, and classroom materials.
“With the sale, we can now focus more sharply on our Managed Training Services business, in which we have been very successful. NIIT added six new clients in the MTS business in the last one year,” the NIIT CEO, Mr Vijay Thadani, said.
Put simply, managed training service is a model where customers outsource the development, administration and management of their training requirements to a third party. The managed training provider then delivers these as a service.
Part of the proceeds from the transaction have been utilised for retiring the debt, Mr Thadani said, adding that NIIT has now become a zero-debt company.
At the last count, Element K had about 550 employees. It was acquired by NIIT in mid-2006 for $40 million.
LONG-TERM SERVICES DEAL
NIIT has also entered into strategic long-term services and licensing agreement with SkillSoft. NIIT will become a product development partner for SkillSoft. “We will be their content development, and technology development partner in e-learning. In addition, the two companies will collaborate on R&D initiatives to create new methods of technology-enabled learning,” he said.
SkillSoft is a provider of e-learning content, online information resources, learning technologies and support services. “This deal is about moving from competition to collaboration model. Both Element K and SkillSoft were competing in learning products business, although SkillSoft is a larger player in that segment. Now we will collaborate with SkillSoft,” Mr Thadani said.
A statement on the SkillSoft Web site said Element K offered financial and operating characteristics similar to its own model, including an annual subscription-based licensing model for access to its learning resources library, and a direct salesforce distribution system complemented by resellers and telesales support. “As a result, overtime the acquisition is expected to support both SkillSoft's revenue predictability and growth,” the statement added.
Posted by Ak Reddy
on 08:06.
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