SkillSoft Acquires Element K

Written by Mike Cooke, Brandon Hall Group

The acquisition of ElementK by SkillSoft further strengthens SkillSoft’s reputation as a dominant content provider. Whether it’s learning content providers, LMS companies, or Talent Management, the market is still and will continue to consolidate.  This merger is the latest consolidation, but expect another wave over the next 12-18 months as HR, Learning, and Talent companies continue to blur together. 

I don’t question the strategic value of this acquisition. The challenge for both companies will be in integration. Typically mergers or acquisitions fail for a multitude of reasons – it will be interesting to see how the two cultures will eventually merge into one. Element K goes from being a part of NIIT to the uncertainty of being acquired and now part of SkillSoft.

Product wise, SkillSoft creates another competitive moat in the catalog course/e-learning business. SkillSoft’s management team should also have the ability to cut costs and increase their profitability. 

Let’s not forget, as much as SkillSoft has content, they also have a strong technology base and expertise. Any customer of SkillSoft or ElementK will be interested to see what will happen with the different LMS each organization has developed. 

As for NIIT, they divest themselves of a company that last generated about $86 million dollars in revenues, with EBITDA of less than 3 million. This appeared to be a very low margin business based on some initial financial analysis. Still, SkillSoft has a history of success, plenty of acquisition experience, and an effective management team that has shown the market they can deliver results.  

If you’re an ElementK client, or potential client of the latest SkillSoft, expect some changes and consider asking the following questions:

  • What products will continue to be supported?
  • What is being phased out? 
  • What new advantages will we see based on this acquisition?
  • What is SkillSoft’s long-term plan? 
  • Will pricing stay the same?
  • How are the two organizations going to integrate?

Nothing like an acquisition on a Friday to get a bunch of industry pundits talking.  Now, if SkillSoft buys a Talent Management Systems company, that will be interesting. 

Mike Cooke

Brandon Hall Group

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