Skillsoft Corp.
SKIL -0.10%
has agreed to acquire rival U.S.-based educational technology company Codecademy for $525 million in cash and stock, the companies said Wednesday, the latest bet on consolidation in the online learning market.
Closely held Codecademy offers free, basic online computer coding classes in areas such as programming, data science and cybersecurity. The New York-based startup’s services also include more in-depth paid offerings. In February, Codecademy raised $40 million in new funding, seeking to expand into markets such as India where a high percentage of people are pursuing engineering degrees.
Based in Boston, Skillsoft offers customers a software that provides training and classes in leadership development, workplace harassment prevention and coursework to qualify as system engineer. Its library of 180,000 courses, books and videos is offered in 29 languages and customers include the U.S. Air Force,
Siemens AG
SIEGY 1.02%
and
United Parcel Service Inc.
Employers have turned to digital training courses through the pandemic as a way to retain and retrain workers in the office or at home.
For Skillsoft, the deal bolsters its technical skills offerings by adding expertise in programming languages aimed at developers and other types of technology workers.
“If you look at the skills gap, it’s most acute in technology,” said
Jeffrey Tarr,
Skillsoft’s chief executive.
Codecademy Chief Executive
Zach Sims
said the sale will give it access to a bigger customer base. The deal “really helps grow Codecademy across businesses much faster than we could independently,” he said.
Skillsoft’s past struggles demonstrate the risks in the fast growing online education market. The company filed for bankruptcy protection in June 2020, hurt by a combination of too much debt and stiff competition from companies that provided free access to similar services.
It emerged from bankruptcy protection in August of that year, eliminating $1.5 billion in debt. It went public in June 2021 in New York through a merger with special-purpose acquisition company Churchill Capital Corp II.
Skillsoft became over-levered by its previous private-equity owners and those issues were addressed by recapitalizing the company and bringing in a new management team and board, said Skillsoft’s Mr. Tarr. He joined the company as part of Skillsoft’s merger with Churchill.
Skillsoft’s acquisition of Codecademy is its third and largest acquisition since the SPAC listing.
The deal brings together two portfolio investments of Amsterdam-based
Prosus
NV, the largest shareholder in Chinese internet and videogaming giant
Tencent Holdings Ltd.
Prosus is Skillsoft’s biggest shareholder, owning a 38% stake, according to FactSet.
Naspers Ltd
, which controls Prosus, holds about a 12% stake in
Udemy Inc.,
a Nasdaq-listed, online-learning operator that supplies content to Skillsoft’s platform. Codecademy also counts Prosus as an investor.
Prosus owns a stake in India ed-tech operator Byju, which has been valued at $16.5 billion. In June Prosus reached a $1.8 billion deal to acquire Stack Overflow, an online community for software developers.
Write to Ben Dummett at [email protected]
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