Learning Technologies acquires Bridge in $50m deal

The AIM-traded firm described Bridge as a learning and talent development software provider, with the purchase being made from Instructure for cash of $50m (£36.1m).

It said Bridge is a learning, performance and skills development platform for mid-enterprise organisations, based in the United States and with operations in the UK and Hungary.

Bridge provides a learning management system in addition to performance, engagement and skills development products, on a single software-as-a-service (SaaS) platform.

The board said the acquisition of Bridge would “significantly extend” Learning Technologies’ mid-enterprise learning and talent offering.

It said Bridge would be “highly complementary” to its ‘PeopleFluent’ product, which serves the large enterprise market, and ‘BreezyHR’, which serves the small and medium-sized business market.

The acquisition was said to be strategically important as it would enable Learning Technologies to provide a “holistic learning and talent development” offering to meet the needs of small, mid-size and large enterprises - three distinct groups with varying requirements.

It said the combination and integration of Bridge with the firm’s other portfolio offerings, including the recently-acquired Reflektive engagement and analytics platform, would create opportunities for cross-sell and upsell-led growth within the group.

Bridge achieved unaudited revenue of $21m in the 2020 financial year, of which more than 90% was derived from recurring annual and multi-year contracts.

It generated an EBITDA loss of $1.3m in the same period.

With the operational synergies that would be created, Learning Technologies said it expected Bridge to become earnings accretive from the second half of 2021, and to align with its typical software division margins by early 2022.

Bridge has more than 800 customers which, combined with Learning Technologies’ global customer base, represented a “compelling” cross-selling opportunity, the board added.

The acquisition, which was expected to complete on 26 February, would be funded from the company’s existing cash resources.

Consideration of $50m at completion would be subject to customary price adjustments.

Bridge would be Learning Technologies’ seventh acquisition since its £81.8m placing in May, bringing the total consideration spent to around £80m excluding performance-related earn outs in that time.

In line with the company’s strategic target to deliver run rate revenue of £230m and adjusted EBIT of £66m by the end of 2022, the board said it would continue to pursue high quality acquisition targets financed through its own cash resources and “modest” levels of debt.

“Bridge adds real strength and depth to our learning and talent offering for the mid-enterprise market, which has attractive structural dynamics.,” said chief executive officer Jonathan Satchell.

“Since the onset of the global pandemic, we have continued to execute on our growth strategy, adapted to new environments and pursued a pipeline of acquisition targets that create long-term value for our stakeholders.

“With Bridge, we are building on our market-leading position in the strategically important area of digital talent development.”

At 0836 GMT, shares in Learning Technologies Group were up 1.85% at 175.9p.