Learning Technologies Group (LTG) is set to exit the London Stock Exchange following its acquisition by General Atlantic for £836m.
- The acquisition price is 100p per share, offering a 34% premium over LTG’s September 2021 share price.
- Despite the premium, the company’s recent valuation is significantly lower than its 2021 market cap of £1.8bn.
- General Atlantic cites market uncertainty and regulatory pressures as reasons for taking LTG private.
- AI’s role in education presents both opportunities and challenges, requiring substantial investment from LTG.
Learning Technologies Group (LTG), a prominent edtech firm, is poised to depart the London Stock Exchange after its £836m acquisition by General Atlantic, a significant private equity entity from the United States. The terms secure an offer of 100p per share, substantially surpassing the company’s share value at the end of September by 34%. Nevertheless, this acquisition figure still reflects less than half of LTG’s valuation when it peaked at nearly £2bn in 2021.
General Atlantic has expressed that the prevailing market and macroeconomic uncertainties necessitate such a move, affirming that LTG’s future growth and strategic plans are better executed as a private entity. They identified the frequent public financial reporting and associated governance issues as constraints, which can be eliminated by transitioning away from public ownership.
LTG foresees that harnessing AI within education services poses both a promising opportunity and a formidable challenge, necessitating increased investment to capitalise on AI’s potential and to mitigate risks. The company acknowledged that certain services might face increased competitive pressure due to AI advancements, impacting demand and pricing models.
In light of existing financial pressures, the firm reported a 12% decline in revenue to £250m for the first half of the year. Consequently, LTG adjusted its full-year revenue forecasts to a range of £473m to £493m, citing the impact of currency fluctuations. The firm anticipates meeting the lower threshold of this revised guidance.
The proposed takeover aligns with a broader trend of significant technological companies opting for private ownership, as exemplified by recent acquisitions of other UK firms. Peel Hunt’s head of research, Charles Hall, commented on the prevailing environment, noting that it highlights the UK’s undervalued companies and the potential necessity for reforms to entice investors to the market.
The transition of Learning Technologies to private ownership reflects current trends in the tech sector amid market uncertainties.
