(MENAFN- ProactiveInvestors)E-learning specialist Learning Technologies Group (LON:LTG) is venturing into the governance risk and compliance (GRC) market with the acquisition of Eukleia. LTG is paying £7.5mln up-front for the provider of e-learning solutions to the financial services sector of which £6mln will be coughed up in cash with the remainder satisfied by the issue of LTG shares valued at 22p each. The cash element will be financed in part by the proceeds from a placing of 35.7mln shares at 21p each which will raise £7.5mln. The cash consideration for the acquisition will be adjusted to take account of surplus cash of £0.8mln in Eukleia at completion. Up to a further £3.5mln will be payable based on the revenue growth of Eukleia in each of the years ending 31 December 2016 and 2017; up to one-fifth of the additional payments payable could be satisfied at the option of LTG in shares. LTG said the acquisition gives it a presence in the GRC market which is growing apace and significantly expands its scale and client base. Eukleia's sector expertise is its key strength LTG said. LTG expects to use its operational expertise to enhance the business and to use its international presence to access other GRC markets in particular the US. "This acquisition meets our goal of augmenting the group with companies that are experts and leaders in their chosen field. Eukleia has grown rapidly in the GRC market and is well placed to benefit from the continued expansion of this market and the internationalisation of its client base' said Jonathan Satchell. 'Both our order book and acquisition pipeline are strong and we look forward to updating shareholders in due course as we continue to work towards our ambition of creating a £50mln revenue group' he added. Speaking to Proactive Investors Satchell revealed that the management of Eukleia is staying with the business 'and coming along with LTG for the journey'. 'It's always part of our mission when we acquire new companies to get the management to day with us' Satchell explained. The acquisition price is about 12 times historic underlying earnings (EBITDA) and Satchell reckons that's a reasonable price for a company that is growing 'phenomenally quickly'. 'The reason they are growing is because they are in what I would call a 'must have' market' Satchell said. Eukleia is an acknowledged expert in the field of GRC and 'advises the advisers' such as the Prudential Regulation Authority. Shares in Learning Technology ebbed 0.75p to 22.75p.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.