Learning Technologies Group Regulatory News (LTG)

10 March 2020

Learning Technologies Group plc

("LTG", the "Group")

(AIM: LTG)

Proposed Acquisition of Open LMS

- Provides LTG with solid foundation in the high-value open-source market

- Multiple routes to enhanced growth through LTG's extensive customer base

Learning Technologies Group plc, the provider of services and technologies for digital learning and talent management, is pleased to announce the proposed acquisition of the business and assets of Open LMS from Blackboard Inc for cash consideration of $31.7million (subject to some customary price adjustments), to be funded by the Group's existing cash and bank facilities.

The proposed acquisition of Open LMS reinforces Learning Technologies Group as an industry leader in learning software, adding complementary expertise to the Group's existing proprietary software solutions, through the addition of expertise in the market's leading open-source Learning Management System (LMS), Moodle. It will support LTG's strategic goal to achieve run-rate revenues of £200 million and run-rate Adjusted EBIT of at least £55 million by the end of 2021.

The Open LMS business will provide LTG with a solid foundation in the high-value Moodle market. Customers across the LTG portfolio will be able to benefit from the popular open-source Moodle LMS delivered across a managed SaaS platform, to create personalised learning programmes. The Moodle community brings together the education market and corporate learning market, for the development of skills to support the needs of organisations across the globe. For corporate users, it enables businesses to offer a continuous learning experience for their people wherever they are and at any time.

Following completion, Open LMS will be run as a standalone brand within LTG's portfolio of best-in-class businesses. Phill Miller, Chief Learning and Innovation officer at Blackboard, will join LTG as Managing Director, bringing significant experience and expertise in the global Moodle market. LTG will support Open LMS through its existing operational infrastructure and, under a partnership arrangement, LTG will resell Blackboard's suite of products that integrate with Moodle to meet the demands of current and future customers.

Open LMS will be acquired by way of a combined asset carve-out and entity acquisition from Blackboard. In the year ended 31 December 2019 the Open LMS business generated unaudited revenues of c.$16 million. Approximately 70% of Open LMS's revenue is derived from recurring subscription fees. The proposed acquisition is expected to complete within 30 days.

Jonathan Satchell, Chief Executive of Learning Technologies Group, said: "I am excited to expand LTG's capabilities through the acquisition of Blackboard's market-leading Moodle expert, Open LMS. The corporate learning market is showing increased interest in this type of scaleable technology, and we will now have the capability to meet customer demand. I am excited that Phill Miller has agreed to join LTG to drive forward our investment in open-source and to expand LTG's position in this important market segment."

Phill Miller, Chief Learning and Innovation Officer at Blackboard, said: "I'm thrilled to be joining LTG and to have the opportunity to deliver on the strong growth potential for Open LMS as part of LTG's portfolio of best in breed technologies for learning and talent management. We have built a highly compelling product offering, and now have the opportunity to establish a clear market leadership position in the popular Moodle market - enabling businesses to focus on developing the skills required for the modern workforce."

Andrew Brode, Chairman of Learning Technologies Group, said: "The addition of Open LMS demonstrates LTG's unique position as a consolidator in the market for learning and talent management software and services. It follows our most recent acquisition, BreezyHR, acquired in April 2019, which has enjoyed excellent growth with revenues increasing by c.60% in FY19. We expect the acquisition of Open LMS to be attractively earnings enhancing. The benefits of our broad portfolio are recognised by LTG's corporate customers, and this opens up an array of opportunities to greatly enhance the revenue of the Open LMS business."

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About LTG

LTG is a leader in the growing 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.

About Moodle

'Moodle', an acronym for "Modular Object-Oriented Dynamic Learning Environment", is a free and open-source LMS used for blended learning, distance education and other e-learning projects in schools, universities, workplaces and other sectors. Moodle was originally developed in 2002 and it is widely seen as the leading global open-source LMS.