Skillsoft Ltd is exploring a sale that it hopes will value the private equity-owned provider of educational software to businesses at around $2 billion, including debt, according to several people familiar with the matter.
Skillsoft, which was taken private in 2010 by Berkshire Partners LLC, Advent International Corp and Bain Capital LLC for $1.2 billion, is working with Deutsche Bank AG to find potential buyers, the people said on Tuesday. The sources asked not to be identified because the sale process is private. A spokeswoman for Skillsoft had no immediate comment. Advent and Bain declined to comment while Berkshire Partners and Deutsche Bank did not respond to requests for comment.
Skillsoft provides electronic learning solutions to more than 6,000 customers globally, including companies and governments. It uses cloud computing, which allows clients to reduce costs by ditching bulky local servers for network-based software and storage in remote data centers. The Nashua, New Hampshire-based company reported adjusted earnings before interest, tax, depreciation and amortization of $139.2 million for the 12 months ending January 31, 2013, up from $111.1 million the year before.
The corporate education and training market is highly fragmented and competitive, with low barriers to entry. One of Skillsoft's competitors, Cengage Learning, which is owned by private equity firm Apax Partners LLP and is also a major textbook publisher, filed for Chapter 11 bankruptcy protection last summer. “We continue to face the normal competitive issues of a wide spectrum of competitors, but also face challenges from the economic environment and customer budgets,” Skillsoft Chief Executive Chuck Moran said on a December 12 call with analysts to discuss the company's fiscal third-quarter earnings.
Berkshire Partners, Advent and Bain committed at least $510 million of equity when they acquired Skillsoft in 2010, according to a credit research note at the time by Moody's Investors Service Inc.