Learning Technologies is slated to exit the London Stock Exchange following a takeover by US private equity firm, General Atlantic.
- The acquisition values Learning Technologies at £836 million, offering a 34% premium per share.
- This valuation is less than half of its peak market cap in 2021, which was nearly £2 billion.
- Emerging AI challenges and market uncertainties prompt the move towards private investment.
- Company directors recommend shareholders accept the offer amidst financial pressures.
Learning Technologies Group (LTG) is set to leave the London Stock Exchange due to a takeover by US private equity giant General Atlantic. This transaction values the education technology company at £836 million, with an offer price of 100 pence per share, reflecting a 34% premium from the previous share price at the end of September. Despite this premium, the company’s valuation is significantly lower than its peak market capitalization of nearly £2 billion in 2021.
General Atlantic highlighted that ongoing market uncertainties and macroeconomic challenges contributed to the decision to take LTG private. The firm believes that as a private company, LTG can better navigate these challenges without the pressures that come with being publicly traded, such as frequent financial reporting and governance burdens. They stated that the next stages of LTG’s strategy execution would benefit from the privacy and flexibility afforded by private ownership.
LTG, a provider of digital learning and talent management services, has faced challenges with the integration of artificial intelligence in its offerings. The company noted that while AI can bring more efficiencies, it also poses challenges to current services and pricing models, necessitating increased investment to adapt. The firm stated that without significant investment in AI, its outlook and business model could face uncertainty.
In September, LTG reported a 12% drop in revenue to £250 million for the first half of the year, attributing it to high inflation and exchange rate fluctuations. Consequently, they revised their full-year revenue guidance downward to a range of £473 million to £493 million. Despite these challenges, LTG shares saw a 37% increase following the acquisition announcement, indicating positive market reception.
The move is part of a broader trend of UK tech firms being acquired by US private equity, as evidenced by recent acquisitions of firms like Darktrace and Gresham Technologies. Observers like Charles Hall from Peel Hunt believe this trend highlights the quality and undervaluation of UK companies, emphasizing the need for reforms to boost investor interest and prevent further exodus from the London market.
The takeover of Learning Technologies by General Atlantic highlights the challenges and shifting landscape faced by UK tech firms amidst global economic uncertainties.
