Learning Technologies Share Discussion Threads

[janeann] 24/4/2018 21:46

interesting; as multi says perhaps explains why GS came on board. I expect an rns to confirm fund raising completed at 8 am.... but at what price ... will be interesting to see. My money would be under £1.

[multibagger] 24/4/2018 21:00

Couldn't agree more Microscope....would expect a decent 5-10p+ increase in share price over the next few days and some short term momentum hunters will surely follow.

Also would expect an interview on Proactive Investors by Jonathan Satchell in the next couple of days.

Interesting times....post UK market close RNS announcement explains lack of posts on this major development. May have raised the £80m by book building before we open tomorrow !!

Good luck all :)

SP for future ref: At close 101p

[microscope] 24/4/2018 20:49

yes like the margin improvement angle. And my favourite quote; they say:

"Immediately and significantly earnings enhancing"

[multibagger] 24/4/2018 18:24

The way I read and understand it (must admit not totally) - this is really MASSIVE for us in terms of recurrent revenue, cross selling, margin improvement potential and capitalising on a 50% of Fortune 100 customer base. Strong foothold in the US as well.

[multibagger] 24/4/2018 18:18

From the book building RNS...
"...Andrew Brode and Leslie-Ann Reed will participate in the Placing by subscribing for Placing Shares for an aggregate amount of GBP2 million...."

[microscope] 24/4/2018 18:18

Yikes plenty to take in. Looks very exciting at first glance. Not seen the methodology of the placing before.

Those who saw the pound sign beside the share price and jumped ship might be ruing it tomorrow!

[multibagger] 24/4/2018 18:14

Janeann...do scroll back, if you will to posts from 16 Feb 2018 and our little "chat". This is why GS came on board. Timing of RNS is geared to the US clearly.

Lot of info to digest but first impressions is that the growth aspirations of LTG have grown manifold.

We are looking at LTG becoming £1b market cap company in the next 2-3 years potentially IMHO, if not before. Let's hope we are able to digest this big bite !

Exciting times and good luck all :)

[multibagger] 24/4/2018 18:04

And there we have it - not far off in terms of my prediction post 563 : 18/04/2018 :)

Learning Technologies Group PLC Proposed Acquisition of PeopleFluent

24/04/2018 4:46pm
UK Regulatory (RNS & others)
RNS Number : 9882L

24 April 2018

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN LEARNING TECHNOLOGIES GROUP PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF LEARNING TECHNOLOGIES GROUP PLC. PLEASE SEE THE IMPORTANT NOTICE AT THE OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014 ("MAR").

24 April 2018

Learning Technologies Group plc

("LTG" or the "Company" or the "Group")

Proposed Acquisition of PeopleFluent for $150 million (GBP107 million)

New and complementary talent management platform and capabilities

Transformational for US presence

Immediately and significantly earnings enhancing

Learning Technologies Group plc ("LTG"), the integrated e-learning services and technologies provider, is pleased to announce that it has entered into a conditional agreement (the "Merger Agreement") to acquire the entire issued and outstanding shares of capital stock of PeopleFluent Holdings Corp. ("PeopleFluent"), the leading independent provider of cloud based integrated recruiting, talent management, and compensation management solutions, from Bedford Funding I, L.P. and Bedford HCM Holdings GP, LLC by way of a reverse subsidiary merger (the "Acquisition") for a cash consideration of $150 million (GBP107 million)(1) (on a cash free, debt free basis), plus transaction costs. The consideration and transaction costs for the Acquisition are intended to be funded by a placing of new ordinary shares (the "Placing") raising approximately GBP80 million, which is conducted outside the United States, and up to c.$48 million (c.GBP35 million) (1) in incremental debt financing(2) .

The Board believes that the Acquisition has a compelling strategic and financial rationale:

-- Complementary fit to LTG
o Strong strategic fit and operational benefits

o Capability, geography and verticals aligned with LTG's strategy, servicing approximately 50% of the Fortune 100

-- Attractive market opportunity
o Large and growing addressable market

o Positive industry tailwinds fuelling market opportunity

o Increasing importance of talent productivity solutions

-- PeopleFluent well positioned to capitalise
o Industry leader with scale

o Multiple avenues of growth with significant opportunity within existing client base

-- Compelling financial profile
o PeopleFluent will be a significant addition to LTG - 2017: c.GBP82.8 million(3) revenue (of which 86% recurring) and c.GBP9.2 million(3) Adjusted EBIT

o Would take LTG to c.GBP135 million revenue business, with Platforms expected to represent 77%(4) of revenues

o LTG recurring revenue increases to c.68%(4) , from c.39%

o LTG Adjusted EBIT increases to c.GBP23.3 million(3)

o Strong sustained cash flow generation

-- Significant cost savings and synergies identified
o Review and integration process to be completed within the first 100 days

o LTG track record of successfully integrating acquisitions, cost management and margin improvement

o Focus on increasing sales productivity, more efficient application of R&D investment and monitoring of chargeable time and utilisation to achieve comparable levels to LTG

o Revenues are expected to reduce in the near term; however, management are confident of their ability to materially improve EBIT margin

o Target EBIT margin of at least 20% for PeopleFluent in FY 2019

o Total non-recurring costs of up to $3.0 million will be incurred in order to deliver these synergies and make important investments related to the PeopleFluent Business

o Acquisition will be immediately and significantly earnings enhancing in 2018 (based on expected completion by 31 May 2018)

o Potential for cross-selling will help to underpin further opportunities for growth

1. Based on current USD / GBP exchange rate of 0.7166 as on 23 April 2018.
2. Amount raised through placing and debt financing expected to contribute to transaction fees with balance remaining with LTG as contingency cash. Total debt finance facility of $63 million subject to covenants: cash flow cover of greater than 1.1:1 from Q1 2019 and leverage not to exceed 2.75:1

3. Based on 2017 unaudited revenue of $106.6m and Adjusted EBIT of $11.9m converted to GBP at an average FY2017 USD / GBP FX Rate of 0.7766. KZO financials not included for full year impact from FY2016. Subject to restatement in accordance with the Company's own accounting principles and policies. Aggregated amounts for LTG and PeopleFluent in this presentation are included for illustrative purposes only. This should not be construed as a profit forecast and should therefore not be interpreted to mean that EBIT in any future financial period will necessarily match or be greater than those for the relevant preceding financial period.

4. Based on GBP21.6 million Platforms revenue from LTG (41% of total 2017 LTG Revenue). Recurring revenue represents 39% of total revenue for LTG. GBP82.8 million PeopleFluent revenue of which 86% is recurring revenue. This should not be construed as a profit forecast and should therefore not be interpreted to mean that revenues in any future financial period will necessarily match or be greater than those for the relevant preceding financial period.

Completion of the Acquisition is conditional upon, among other things, completion of the Placing, the incremental debt financing being available at completion of the Acquisition, all applicable waiting periods (and extensions thereof) under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have expired or otherwise been terminated by the parties, and the Merger Agreement not being terminated, in each case, in accordance with the terms of the Merger Agreement.

Subject to the fulfilment of the above conditions, the Acquisition is expected to complete shortly after the satisfaction of the U.S. anti-trust condition which is expected to take approximately two weeks if the U.S. anti-trust authorities grant early termination of the statutory waiting period, and 30 days or more if early termination is not granted. Completion of the Acquisition is therefore expected to occur in May 2018. Details of the conditions to the Acquisition are also set out in this announcement below.

Commenting on the proposed Acquisition, Jonathan Satchell, Chief Executive of LTG, said:

"I am delighted to announce the proposed acquisition of PeopleFluent, a leading talent management platform that will be transformative for our US presence and brings us new and complementary capabilities. Learning and talent are closely aligned and integrated talent and learning solutions will become vital as the pressure increases on corporates to attract, develop and retain people.

This acquisition is fully aligned with our stated strategy from a capabilities, sector, geographic and financial profile perspective. PeopleFluent brings a large installed base of customers and significantly expands our international footprint with its US presence. We believe the financial effects of the acquisition are highly compelling."

Commenting on the proposed Acquisition, Andrew Brode, Non-Executive Chairman of LTG, said:

"I am excited by the potential of an enlarged LTG, incorporating PeopleFluent - we will now be a business with estimated GBP135m revenue and a strong platform for future growth. This is a transformational moment for LTG. The team from PeopleFluent are joining an exciting journey as we look to consolidate the growing yet fragmented corporate learning and talent management industry."

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this Announcement is being made on behalf of the Company by Neil Elton.

[multibagger] 24/4/2018 11:57

Agree Longshanks that there is still plenty left in the tank share price wise.I expect that on news of anticipated acquisition(s) it could easily add another 5-10p pretty sharpish (depending on the nature,revenues and financing of the deal).

At this rate, my guess of a share price of 113p by end June 2018 (gentleman's wager with Tarrant77) will be blown out of the water well before !

Happy to pay up, of course :)

Good luck all !

[longshanks] 24/4/2018 11:31

Berenbergs recent 105p buy rating will soon be tested at this rate.I see little point selling just yet. Whilst fully valued, this is a class A stock with oodles of potential still.

[aimingupward2] 24/4/2018 11:11

Well, it seems we’re through the psychological pound barrier, (if, indeed, it was a barrier) and so the share price can travel on upward for a bit yet - perhaps for a while if more good news comes in re a sizeable acquisition.

[pastybap] 23/4/2018 16:08

Probably because I sold this morning...

[drsamwaa] 23/4/2018 14:29

Whats driving this today?

[multibagger] 23/4/2018 14:26

Good to see that we broke through the £1 barrier pretty easily...I would expect some consolidation around this figure before the next leg up :)

Good luck all !

[aimingupward2] 23/4/2018 13:36

A few people are now being seduced out by the attraction of getting £1 a share. I suspect that it will prove to be a wrong decision before long.

[microscope] 19/4/2018 14:52

Given the speed of the recent rise, i guess the 1 million will turn out to be another sale to satisfy institutional demand.

Anyone remember the blogger that slagged off Satchell for the last liquidity sale about maybe six weeks ago, at 75p... We said at the time it was lazy lack of research! :)

[multibagger] 19/4/2018 14:46

Hi Janeann,

Been buying for quite a while and in decent profit - thanks!

FWIW, I struggled to get even 40k shares and had to pay 99.50, so I think the 1m at 99p could have been a buy :)

Having said that JS sold 6m shares at 75p....and potentially already lost £1.5m
Now that is what you call loose change - you won't see him flinch ! ;)

[petersinthemarket] 19/4/2018 14:41

according to advfn, someone just sold 1 million shares at 99p!

[janeann] 19/4/2018 14:10

well multi - that's a lot of loose change to have lying about!!!; must be well in profit from your last buy. Hat off to you.

[multibagger] 19/4/2018 13:57

Took another 40k shares at 99.50 (averaging up on new highs) :)

More share price growth to come....massive potential IMHO !

Good luck all !

[rampmeister] 19/4/2018 13:32

Listening again to the post results interview with Proactive Investor, Satchell gives some pretty strong hints of LTG ambitions in the USA.

We always had a well known desire to bulk up in America and we are seeing a lot more opportunities and flow from there. We have a strong intention of getting there quickly and
We like the combination of Numis/GS and the M&A advisory they offer.

On a more general level he talks about greater level of repeat business than they had modelled and faster growth in new business than expected.

Above are not exact quotes but as close as I remember.

RM

[multibagger] 19/4/2018 12:27

Knocking on the door of £1 :)

Good luck all !

[davr0s] 18/4/2018 19:36

Think you are looking too closely at it - it's noise and irrelevant to the bigger picture

[multibagger] 18/4/2018 16:12

Thanks Janeann for the clarification :)

[janeann] 18/4/2018 15:58

goes ex dividend on 7 june so it isn't that.