Learning Technologies Group (LTG) is strategically set up to grow directly through consolidation of the corporate e-learning sector. In fact, its directors believe it’s the first listed company in the UK focused on consolidation of this nascent industry. Its array of companies provide content management systems, learning assets, games, training delivery and much more to multinationals and public sector organisations looking to upskill their staff.
If LTG’s growth continues its performance could well set the benchmark for achieving success through sector consolidation - in 2016 LTG’s revenues jumped 42 per cent to £28.3 million (against £19.9 million in 2015), and recurring revenues almost tripled to 27 per cent (against 10 per cent in 2015).
Its success has been driven in large part by two things: acquisitive growth and the ability to offer clients a blended e-learning service. We take a look at Learning Technologies Group and how it’s got to where it has.
Epic start
In November 2013, the same month it joined AIM, LTG acquired Epic, a Brighton-headquartered learning technologies agency with offices in Rio de Janeiro and New York. The acquisition was the beginning of LTG’s journey through the e-learning sector.
Growth through acquisition
Following Epic, LTG embarked on its buy-and-build strategy as it sought to gain a foothold in the sector. In April 2014 it bought LINE Communications; a strategic purchase through which LTG merged LINE with Epic to create a learning technologies business with revenues of £50 million.
Today the merged business is known as LEO, a company LTG regards as its ‘foundation stone’ for sector growth.
And the acquisitions continued…
Preloaded (May 2014) - a specialist learning games company, adding more strings to LTG’s e-learning bow.
Eukleia (July 2015) - an e-learning provider specifically focused on the financial services sector. This buy gave LTG the ability to meet growing demand for governance, risk and compliance services.
Rustici Software (January 2016) - a market leader in the sharing of digital information.
At the same time LTG also took a 30 per cent stake in Watershed Systems, a learning analytics platform developer set-up by the founders of Rustici.
NetDimensions (March 2017) - an integrated enterprise talent management software platform provider. This “transformational” acquisition added learning management technology to LTG’s portfolio and will also enable it to expand into the Asia-Pacific region.
Full service offering
LTG’s raft of e-learning companies has allowed it to offer a full e-learning service, which has also supported its growth strategy.
The best example of this was LTG’s massive December 2015 deal with Civil Service Learning. In partnership with KPMG, LTG secured a three-year contract to develop and deliver, through LEO, learning services for the entire UK Civil Service. Employing more than 400,000 people, this is no small feat and the contract is the biggest LTG has ever won.
Heading overseas
LTG is also diversifying. Its latest financial results show that international sales now represent 36 per cent of its business.
“Buying the Rustici business gave us a concentration in North America so that was a contributor, but also we organically grew our overseas revenue, so I think the diversification with international revenues is pretty important,” said LTG chief executive Jonathan Satchell in an interview with Proactive Investors.
Focus for 2017
Satchell added that LTG plans to do “more of the same” in the year to come, but warned that the company would continue to pursue acquisitions strategically.
“Perhaps the market’s questioning that we’ve not done an acquisition for nearly 12 months now,” he said. “We are a buy and build stock, and I want to reassure the market that we are absolutely pursuing that strategy, but we are very discerning, apprehensive of getting it wrong.
“I'd rather do no deal than the wrong deal. We've had a couple of tilts at things that haven't worked out. We are very excited about the pipeline of acquisitions, but there is no certainty with these things.”
LTG has also said that 2017 trading has, so far, been ahead of last year, driven by a healthy order book. LTG’s strategy of sector consolidation, providing a full service offering and pursuing a strategic acquisition strategy rather than buying wantonly make the firm one of the very best examples of how to grow a technology firm.
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