Learning Technologies Group Regulatory News (LTG)

17 April 2019

Learning Technologies Group plc

("LTG", the "Group")

(AIM: LTG)

Acquisition of Breezy HR

US based acquisition brings strong organic growth potential and recurring revenue

Expands the Group's talent acquisition offer across multiple markets

Learning Technologies Group plc, the leading integrated digital learning and talent management services and technologies provider, announces the acquisition of Breezy HR ("Breezy") for initial cash consideration of USD 12 million to be funded by the Group's existing cash and bank facilities. The acquisition will support LTG's strategic goal to achieve run-rate EBIT of at least £55 million by the end of 2021.

Breezy is a fast-growing talent acquisition software business, providing small to medium sized businesses (SMB) with feature-rich, intuitive and user-friendly recruitment software to optimise their recruitment processes and maximise productivity. Breezy will become a business within PeopleFluent, part of LTG's Software & Platforms division.

The addition of Breezy to LTG's best-of-breed talent and learning businesses is expected to enhance the Group's position in the talent acquisition market. The acquisition extends the Group's existing enterprise client-base to include a new SMB audience, with typically faster self-service sales-cycles. Since its founding in 2014, Breezy's software has managed the recruitment of 15 million candidates across 10,000 companies in 72 countries.

This complementary acquisition builds on LTG's acquisition of PeopleFluent in 2018, which introduced a transformational talent management capability to the Group. Breezy brings a proven and successful intuitive experience for candidates, recognised by Gartner as the most highly rated Applicant Tracking product for customer satisfaction. We expect to leverage these features of Breezy's software suite to support swifter and richer new feature releases to PeopleFluent's Talent Acquisition enterprise customers.

Breezy CEO, Darren Bounds, will continue with the business as Managing Director, in addition to joining the PeopleFluent senior leadership team.

In the year ended 31 December 2018 Breezy reported unaudited revenue of USD 3.6 million (2017: USD 1.3 million) and EBIT grew to USD 280,000 (2017: USD 826,000 loss), reflecting the operational leverage of the business as it scales rapidly; 80% (2017: 67%) of Breezy's revenue was derived from recurring subscription fees.

Cash consideration at completion will be USD 12 million. Further performance based payments, capped at USD 18 million are payable in cash to the Breezy management and equity investors based on ambitious revenue growth targets in each of the years ending 31 December 2019, 2020 and 2021. The acquisition will be funded from existing cash and bank facilities and is expected to be immediately earnings accretive.

Jonathan Satchell, Chief Executive of Learning Technologies Group, said:

"I am delighted that LTG is acquiring the software, skills and further growth potential of Breezy. This fast-paced and innovative business will be enhanced by the support of LTG.

Together with PeopleFluent, our talent acquisition software will span the market from large enterprise to early-stage start-up, with excellent organic growth potential in the mid-market segment. When evaluating Breezy, I recognised similar characteristics to our successful 2016 acquisition of Rustici - another acknowledged leader in its field, with substantial recurring revenues and a high-quality management team." 

Darren Bounds, CEO of Breezy HR, said:

"I'm thrilled to have the opportunity to combine our vision with that of LTG, enabling us to deliver greater business value and product innovation to both existing and future customers, all at a more accelerated pace than would have been possible on our own."

Andrew Brode, Chairman of Learning Technologies Group, said:

"The acquisition of Breezy brings additional outstanding software features that will be incorporated into PeopleFluent's enterprise solution. It is a fast growing, high quality business that will fit well within LTG.

I'm delighted with LTG's continuing strong development. Q1 2019 has been very positive and alongside today's acquisition my confidence that LTG will deliver its strategic revenue and EBIT objectives by the end of 2021 is further enhanced."

ENDS

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About LTG

LTG is a leader in the high growth workplace digital learning and talent management market. The Group offers end-to-end learning and talent solutions ranging from strategic consultancy, through a range of content and platform solutions to analytical insights that enable corporate and government clients to close the gap between current and future workforce capability.

LTG is listed on the London Stock Exchange's Alternative Investment Market (LTG.L) and headquartered in London. The Group has offices in Europe, North America and Asia-Pacific.