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Skillsoft Gobbles Up Global Knowledge — What's Next?

It was an eventful 2020 for training company Skillsoft, which dodged a bankruptcy bullet and came roaring back to add a major competitor to its own portfolio. What lies ahead for the new mega-training tandem?

Skillsoft dodged a bankruptcy bullet at the end of 2020 in spectacular fashion.The announcement of a business merger between online education giants Skillsoft and Global Knowledge created some notable ripples in the IT training and certification industry in late 2020. The announced transaction is still pending approval from regulatory bodies and company shareholders, but the deal is expected to be finalized this spring.

 

The announced merger is more complicated than the headlines suggest. The behind-the-scenes workings of the deal, in fact, are nearly as complicated as the plot of a Christopher Nolan movie. Here is a short-form summary of the proceedings:

 

Skillsoft filed for Chapter 11 bankruptcy protection in June 2020, quoting a debt load of $2 billion. A court-supervised process enabled the company to shed $1.5 billion of its debt while procuring $50 million in cash.

 

In October 2020, Churchill Capital, a special purpose acquisition company, announced it was going to merge with Skillsoft in a $1.3 billion transaction. Simultaneously, Churchill Capital stated its intention to purchase Global Knowledge for $233 million.

 

In November 2020, Churchill Capital revealed that Prosus, a technology investment company, would exercise its option to invest $500 million in the new company, which will operate under the Skillsoft corporate banner.

 

There is a myriad of additional details concerning the various ownership stakes and funding arrangements, but the primary takeaway is that the new Skillsoft company will have significant financial backing and an international reputation. It will also have the potential to become the world's most significant online education company.

 

Corporate Bios

 

Skillsoft dodged a bankruptcy bullet at the end of 2020 in spectacular fashion.Skillsoft was founded in 1998 and became a public company via IPO in 2000 during the height of the dot-com boom. The company strategically grew through a series of acquisitions: Books24x7, NETg, Element K, MindLeaders, SumTotal Systems, and Vodeclic SAS were all purchased between 2001 and 2015.

 

Skillsoft itself was purchased by investment firm SSI Investments in 2010, and was later sold to another investment firm, Charterhouse Capital Partners, in 2014.

 

Global Knowledge has been a private company since its inception in 1995, and operates locations in more than a dozen countries worldwide. Its primary focus has traditionally been on IT training, but the organization has recently expanded into business skills training built to complement its primary offering.

 

The company has come under some criticism for its ongoing strategic shifts — changes which have not been well received by its employees. Global Knowledge's employer rating on Glassdoor currently sits at 2.2 stars out of 5, based on 330 reviews. A number of recent reviews mention uncertainty over the company's direction as a negative workplace factor. It's difficult to predict whether Global Knowledge's impending sale will trend more positively with its workers.

 

Timing is Everything

 

The timing of the Skillsoft transaction couldn't be better for all parties involved. The COVID pandemic placed online education in the spotlight in 2020, and the format clearly showed its reliability and effectiveness for corporations across multiple industries.

 

The emphasis on corporate e-learning in 2020 led to notable improvements in its quality and value. One adaptation known as microlearning has become popular with both employers and employees. Microlearning restructures online training into smaller bites — typically just a few minutes per session — making it easier for employees to absorb the content.

 

Skillsoft dodged a bankruptcy bullet at the end of 2020 in spectacular fashion.The microlearning format also makes online training more accessible to fit into the average information worker's schedule, thanks to its short on-demand window.

 

The new Skillsoft company is positioned to take advantage of a bull market for online training. The demand for corporate e-learning is not expected to falter in the upcoming months, even if the COVID pandemic begins to ebb in 2021. In fact the corporate compliance training market is expected to grow from $3 trillion in 2018 to $8 trillion in 2025 according to a report from eLearningInside.com.

 

The addition of Global Knowledge adds a highly-developed IT training function to the new Skillsoft. Global Knowledge is recognized as a leader in the IT industry training space. The company was recognized as "Microsoft's Learning Partner of the Year" in 2019, and was the first to have its training schedule integrated directly into the Microsoft Learn website. Global Knowledge is also an authorized training partner for CompTIA, Cisco, IBM, Red Hat, and VMware.

 

It's not difficult to see the joint benefits of the Skillsoft — Global Knowledge merger. The combined assets and resources of both companies (along with the generous cash injection from Prosus) will potentially result in the world's leading e-learning organization.

 

Big Pond, Smaller Fish

 

Skillsoft dodged a bankruptcy bullet at the end of 2020 in spectacular fashion.There are a number of smaller corporate online training companies that won't be enthusiastic about the Skillsoft and Global Knowledge merger. Companies like CGS, Fast Lane, Pluralsight, Learning Tree, CBT Nuggets, TestOut, and NIIT are likely to get squeezed by Skillsoft in some shared e-learning markets.

 

There is also the growing presence of LinkedIn Learning to consider, as Microsoft has the resources to aggressively promote its corporate e-learning product to clients across multiple industries. Microsoft already has a large footprint in the enterprise which gives it an edge when hawking LinkedIn Learning to its business partners and customers.

 

The expected growth in demand for online training, however, could mean there is room for the smaller fish to survive in the new corporate e-learning marketplace. What remains to be seen is whether the standing clients held by smaller online training companies will survive the COVID-based economic hit and continue operations into 2021 and beyond.

 

Skillsoft's Next Act

 

The new Skillsoft will have a lot going for it in 2021 and beyond. The company will have money in the bank from its internal investors, a predicted growing marketplace for its core services, and the addition of a top IT industry online training organization in Global Knowledge.

 

There is still a lot of uncertainty around the rapidly approaching new year, but the emphasis on telecommuting and targeted Software as a Service (SaaS) solutions for employees will almost certainly remain in place. Hopefully, the demand for corporate online training will keep Skillsoft — and its competitors — busy through 2021 and beyond.

 

 

Aaron Axline is a freelance technology writer based in Canada.ABOUT THE AUTHOR

Aaron Axline is a freelance technology writer and knowledge management specialist based in Edmonton, Canada. His work has appeared in titles from Que Publishing, and on many tech blogs and websites. His professional writing site is AaronAxline.blogspot.ca.