Learning Technologies (LTG) is set to become the latest tech company to depart the London Stock Exchange after agreeing to a takeover by US private equity giant General Atlantic.
The offer price of 100p per share represents a 34% premium on Learning Technologies’ share price as at end September and values the edtech firm at £836m. However, that is still less than half the market value of the stock when at its peak in 2021, when it was worth £1.8bn.
General Atlantic said: “In the context of continued market and macro uncertainty, General Atlantic…believe that the next stages of LTG’s journey and the execution of its strategy can be best delivered as a private company without the external pressures placed on a publicly owned company including frequent public financial reporting requirements and the associated governance, cost and regulatory burdens.”
LTG said the emerging use of AI in the education sector was proving a major challenge for the business for which it needed more investment.
The firm said in a statement: “While AI provides the opportunity for substantial efficiencies in the provision of content and services, it may also mean that some services and activities provided by LTG will be challenged, adding to the current pressure on demand and pricing for custom content work.
“The impact of these trends on LTG has been to create uncertainty on the outlook and business model across certain aspects of the Group and is expected to increase the levels of investment required to capture the opportunities created by AI. Without such levels of investment, the outlook for LTG would be more uncertain.”
“Following careful consideration of the financial terms of the cash offer, the combination of value and certainty that the terms of the cash offer provide to LTG shareholders, and the factors noted above, the independent LTG directors intend to recommend unanimously the cash offer to LTG shareholders.”
In September, LTG pointed to high inflation and the growth in AI adoption as it posted a drop in revenues and cut back its forecasts.
The London-based edtech, which provides businesses with digital learning and talent management services, reported a 12% drop in revenue to £250m for the first six months of the year.
LTG cut back its full-year revenue guidance from between £480m and £500m to between £473m £493m owing to exchange rate fluctuations, and said it expected to land at the bottom end of the new range.
Following the offer announcement, the company’s shares have risen 37% compared to the same time last year.
The deal makes LTG the latest tech firm to quit the London Stock Exchange following an offer from US private equity firm, following a £4.3 bn swoop for Darktrace in April and fintech Gresham Technologies was bought by STG for £147 million.
“The scale of activity and level of premium show how many good quality companies there are in the UK as well as how undervalued they are,” said Charles Hall, head of research at Peel Hunt.
“This further reinforces the need for fundamental reform to stimulate investor demand in the UK market. If this doesn’t happen in the near future, there will undoubtedly be many more companies leaving the London market in 2025.”
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