E-Learning Stars To MergeE-Learning Stars To Merge

In one of the most significant E-learning acquisitions to date, online training-content supplier SmartForce plc will acquire Centra Software Inc., a maker of Web-based collaboration software, in an all-stock transaction worth $284 million.

The acquisition will allow SmartForce, already a major E-learning player in terms of IT training content and services, to increase its share of the infrastructure market, thanks to CentraOne, a popular suite of online collaboration and live E-learning applications. The combined company will have more than 2,000 employees and a research and development budget of more than $60 million, SmartForce says. The deal is expected to close in the second quarter.

SmartForce also will gain access to Centra's 775 customers, including Procter & Gamble, Heineken, Deutsche Telecom, and Cingular Wireless.

"Centra is the leader in the E-learning application market in terms of live collaboration," says George Sutton, managing director of Dain Rauscher Wessels. While SmartForce previously partnered with WebEx for online collaboration offerings, Centra's focus on the E-learning space aligns better with SmartForce's business strategies, Sutton says. "The deal will help SmartForce offer a full suite of solutions," he adds.

The highly fragmented E-learning market has seen several signs of consolidation in the last 12 months. In October, learning-management system supplier Docent Inc. acquired learning-content management developer gForce Systems Inc., and in April, competitor Click2learn Inc. purchased Intelliprep Technologies, also a content-management developer.

On the same day the acquisition was revealed, SmartForce reported fourth-quarter revenue of $65.3 million, up 13% from the same period last year. Excluding the amortization of intangible assets, SmartForce recorded a profit of $2.6 million, or 4 cents a share, compared with a profit of $648,000, or 1 cent a share, on revenue of $57.7 million for the same period last year.