Irish electronic-learning company ThirdForce is to buy MindLeaders.com, a privately US-based rival, for $18 million (€13.4 million).
In a statement to the Irish stock exchange yesterday, ThirdForce also announced a share placing to help fund the acquisition. Up to 68.4 million shares will be placed at a price of 19 cent - a 30 per cent discount to yesterday's closing price of 27 cent.
The Dublin-listed, but British-based, company said that in order for it to move from its position as a leading independent e-learning provider in Britain to a global leader, it needed a significant presence in the US market.
As a result, it had been on the lookout for a suitable acquisition for several years. It said it had found in MindLeaders "an opportunity which meets its key acquisition criteria", such as a recognised e-learning brand in the US, a profitable model that generates significant recurring revenue and access to a strong product portfolio.
The acquisition, which was first mooted earlier this month, will be funded with a $9 million cash payment, with the remainder being paid in shares. Under the terms of the agreement, which is being classed as a merger, MindLeaders will receive 85 per cent of the total consideration, comprising $7.65 million in cash and the same amount in ThirdForce shares, when the transaction closes and the balance 21 months later.
The proceeds of the share placing will be used to fund the cash element of the deal.
Upon completion, MindLeaders will become part of an enlarged ThirdForce which, on a pro forma basis, would have generated revenues of €30.6 million and Ebitda (earnings before interest, tax, depreciation and amortisation) of €3 million last year.
ThirdForce, which is known for its acquisitive nature - it acquired Electric Paper in 2003 and Creative Learning Media in 2005 - yesterday revealed the details of the placing, saying it plans to raise a minimum of $10 million and a maximum of $13 million. The money raised will also provide working capital for the growth plans of the enlarged group. The placing of 68.4 million shares will represent 27 per cent of the enlarged share capital, which is listed on London's AIM and the Dublin IEX.
