SpongeBob Squarepants is ready to take on the citizens of Bikini Bottom in the first ever undersea typing tournament. His eye is on the big prize: a seanut butter and jellyfish jelly sandwich. But he can't type and needs his army of young fans to help him learn the rudimentary art of typing, and in the process teach themselves a tool for life.

This software package, on sale in the US for $19.99 (€15), is the latest attempt by Riverdeep to extend its presence in the home to boost sales. Probably best-known for its comprehensive courseware software that is sold to schools, Riverdeep is also selling tens of millions of dollars of supplemental education products and personal publishing software for use in homes.

Scooby Doo, Reader Rabbit and the underwater cartoon character, SpongeBob Squarepants, are just a few of the popular brands that Riverdeep is using to tap into children's minds. It has also expanded its product lines to include software for typing and photo-editing.

"There is a perception that Riverdeep is just a schools-based curriculum business in Ireland but we actually have three separate lines of business, from desktop publishing packages to photo-editing software," says Barry O'Callaghan, chief executive and major shareholder in Riverdeep, the biggest-selling indigenous Irish software company.

Riverdeep, which was founded in 1995 by e-learning pioneer Pat McDonagh, is now one of the biggest global e-learning firms, supplying 45,000 customers across 20 countries. Its core product called Learning Village is a learning management system sold to schools that offers a web-based integrated management system that can track truancy and offer a portal of relevant e-learning courseware.

Riverdeep has grown aggressively over the past few years by acquiring firms such as The Learning Company (which gave it access to consumer and education software titles), Broderbund (which added the brands Print Shop and PrintMaster, and 3D Home Architect). However, the firm remains largely unknown in the Irish marketplace, particularly since it was taken private in 2003 - in a deal supported by management but severely criticised by media pundits due to its valuation level.

So how is it faring since it stopped publishing results when it was listed on the Nasdaq?

"We are now making revenues of $250 million a year and operating profit worth $65 million," says O'Callaghan, who owns the largest single shareholding in the firm of 35 per cent. "About 80 per cent of this is made in the US, with the remainder spread over the other countries we sell in."

Pat McDonagh, who founded the other big Irish e-learning firm SmartForce - now called SkillSoft - owns 30 per cent, and Reed Elsevier owns 10 per cent.

Last year, Alchemy, the venture capital firm that backed the management buyout, was bought out by McDonagh and O'Callaghan in a deal backed by debt financing and a bond issue. The venture capitalists were well-remunerated for their short involvement with the company.

"We took the business private at $1.50 and recapitalised it at $2.35. I think we are now looking at a valuation of about $3 a share," says O'Callaghan, who emphasises that all Riverdeep shareholders were offered a mechanism to enable them to hold on to their shares in the firm.

He also signals an early flotation on the market is unlikely.

"I can assure you it is highly unlikely that we will come back to the market anytime in the next two to three years for the simple reason the business is going very well," says O'Callaghan. "Profit is growing at 20 to 25 per cent per year and we are servicing our debt okay. So why sell out now? It is better to keep hold of the shares and grow the company."

Riverdeep is also avoiding the extra costs associated with maintaining a stock market listing and complying with quarterly results requirements on public markets, says O'Callaghan, who seems to be enjoying his lower public profile since his acrimonious duel with the New York hedge fund Rocker Partners, which encouraged him to take the firm private.

A more likely option over the next year or two is to refinance its debt, says O'Callaghan.

Riverdeep bonds trade on the Luxembourg stock exchange and the firm's debt is graded by the ratings agencies Moody's and Standard & Poors. Management also take part in quarterly conference calls with their analysts but these are not open to the media.

This lack of financial information makes it very difficult to track how the company is doing at any particular time. Trace Urdan, an US analyst who covers the e-learning sector, says the firm is not on most analysts' radar screens, but feedback from the market seems largely unchanged on its performance.

"Riverdeep is a brand that buyers certainly know and would describe as a leader in educational software," says Urdan. "But it is still perceived as an assemblage of different pieces and not so much as that complete solution ... the predominant trend is toward complete instructional programs designed in whole and sold with a full complement of training - both online and offline."

But O'Callaghan insists he has no immediate plans for acquisitions despite having $50 million of cash on the Riverdeep balance sheet. Instead, since the firm was taken private, he has attempted to cut costs while boosting sales.

Riverdeep now employs 500 people, about the same number as when it was a public company, but it has outsourced its retail sales channel by signing a distribution deal with US firm Navarre. This enables the firm to get easier access to large chains like Walmart while not paying a large sales force, says O'Callaghan.

The firm is also aiming to extend its reach into the British market by employing a direct sales team. Its product lines are being localised to suit the English education system and a new chief executive has been hired to head the unit, which is generating sales worth $10 million a year.

Ironically, Riverdeep sells very little product into the Irish market, where schools tend to be years behind their European and US counterparts terms of e-learning, says O'Callaghan.

"We do less than $100,000 worth of business in Ireland and it is not for lack of effort ... The Government is focused on broadband for schools but it fails to realise that, in the absence of content, it is all a waste of time."

Diversifying its market presence is important for Riverdeep, which is vulnerable to changes in federal and local government funding for US schools. The US technology consultancy Gartner recently issued a report on the e-learning sector highlighting that it continued to experience growing pains, and a market shakeout is expected to continue.

Riverdeep will need to continue to offer innovative content and entice school boards and consumers to support its growth. If it can do this, a trade buyer such as McGraw Hill or Scholastic may prove an earlier exit than any prospective return to the market.