E-learning group ThirdForce has announced a 43 per cent increase in interim operating profits to €334,000 for the first half of the year.

It has also announced the acquisition of privately-held UK e-learning company Creative Learning Media (CLM) in a cash and equity deal worth up to £5.5 million (€8.1 million).

"We are not going to be on the acquisition trail forever but if we are to be a global company, we see ourselves in the US, so that's on our radar," said chief executive Brendan O'Sullivan.

ThirdForce will initially pay £1.2 million in cash and £2.4 million in ThirdForce shares for the entire share capital of CLM.

If the company meets certain sales targets by May 2006, the vendors could earn up to a further £2 million in shares.

Shares in ThirdForce, which is chaired by Riverdeep and SkillSoft founder Pat McDonagh, are traded on the AIM in London and the IEX in Dublin.

The core market for ThirdForce, which has three divisions trading under the Electric Paper brand, is basic computer skills, primarily in the form of electronic courseware for the European Computer Driving Licence (ECDL), the largest computer accreditation programme in the world.

Through the acquisition of UCD campus company AV Edge in 2004, it moved into the adult literacy market and earlier this year it launched Electric Paper Assessment, which delivers exams online.

The CLM acquisition moves ThirdForce into the hospitality sector as the company provides e-learning materials on issues such as food handling and health and safety.

Last year, CLM had audited revenues of £2.8 million.

ThirdForce's interim results show that revenues fell slightly to €5.72 million from €5.86 a year previously.

However, losses fell 29 per cent year-on-year to €498,000.

Mr O'Sullivan said 2005 was a year of investment for the group and, in line with this, net debt increased from €2 million to €2.5 million to provide working capital.

ThirdForce has offices in Dublin, London, Canada and Australia.