News Corp Divests Online Training Company Learning Seat to Private Equity Backed Management Buyout

7th Nov 2012. Melbourne-based e-Learning company Learning Seat has been acquired by a private equity backed management buyout brokered by advisory firm Wingate Group. The transaction terms have not being disclosed.

With offices in Melbourne, Sydney, Brisbane and Adelaide, Learning Seat is a Melbourne-based supplier of web-based learning programs for Australian corporations, government groups, industry associations and commercial training provider. It was established in 2000, and was acquired by News Limited in August 2006. The company’s online courses, training tools and eLearning resources are geared toward compliance, professional development and accredited training. Learning Seat chief executive officer Tim Legge and his staff will remain with the company.

“During the six years Learning Seat has been part of News Limited we have undergone enormous change and growth. We have quadrupled our client base and our revenue has grown more than 20 percent year-on-year,” Mr Legge said. “However, the reality is that our strategy is going in a different direction to News’ strategy and so it makes sense to become an independent organisation.

News Limited chief financial officer Stephen Rue said: “Learning Seat is an excellent business which has carved out a leading position in a high-growth industry. “While our focus now lies in other areas, we have every confidence in Tim and his team and will be cheering on their future successes.”

The business has been sold to a group of investors including The Wingate Group and The Riverside Company, with Wingate’s private equity approach facilitates direct co-investment alongside Wingate on a deal-by-deal basis rather than through a traditional private equity fund arrangement.

Farrel Meltzer, managing director of Wingate, said that part of the motivation for the acquisition was the strength of the Learning Seat team. “Tim Legge, chief executive of Learning Seat and his impressive team will continue to build what is a quality business with great growth prospects. For the transaction, Wingate partnered with lead investor The Riverside Company, a leading global private equity firm.

Learning Seat is the third platform investment for Riverside in Australia, after healthy quick-serve restaurant operator and franchisor Retail Zoo (May 2010) and Independent medical assessment provider MLCOA (June 2010). Head quartered in New York, Riverside is a global private equity firm with US$3.2bn under management. Riverside focusses on acquiring growing businesses valued at up to $200 million. Since its founding in 1988, Riverside has invested in 300 transactions. It operates 20 offices employing more than 200 people in 14 countries. The firm’s international portfolio includes more than 70 companies. The investment was made from its Asia Pacific Fund II.

“With our deep experience in the education & training sector, we are confident that we can accelerate expansion at Learning Seat,” said Riverside Principal Brad Lynch, formerly a Director with ANZ Capital. “We identified numerous growth opportunities during due diligence, and have the team and resources to capitalize on them.”

In addition to sourcing the opportunity for Riverside, Wingate provided equity financing for the transaction via Winsaf, a joint venture private equity firm between the Wingate Group and Safika Holdings, a Johannesburg-based private investment company.

Moss Ngoasheng, chief executive of Safika Holdings said “This is our first significant acquisition in partnership with Wingate, and is in line with Safika’s expansion strategy. We are focusing on businesses that are well-established and which have potential to expand within Africa and elsewhere.”

“We are delighted with the acquisition of Australia’s premier e-learning institute; it is our intention to bring Learning Seat to South Africa and other African countries in due course,” said Ngoasheng. “There is potential for considerable growth in South Africa and elsewhere in Africa for e-learning. Learning Seat is in the forefront of the e-learning revolution that is taking place in education; the knowledge and expertise it brings can be very beneficial for Africa.

The Commonwealth Bank of Australia provided debt financing for the transaction.

Posted in M&A - Austr - S/W & Services, M&A - US - Media & Telcos, PE Investments - Aus and tagged , , , , , , , , , , , , .