Learning Technologies Group (LTG) will leave the London Stock Exchange following a takeover by General Atlantic.
- Shareholders are offered a 34% premium per share, valuing LTG at £836m, less than half its 2021 peak value.
- The decision reflects challenges posed by AI in education and economic conditions impacting LTG’s revenue.
- LTG shares rose 37% post-announcement, highlighting market reactions to the takeover.
- The UK tech market sees significant equity movements, exemplifying undervaluation issues needing reform.
Learning Technologies Group (LTG) has agreed to a significant acquisition by US-based private equity firm General Atlantic, prompting its exit from the London Stock Exchange. The acquisition offers LTG shareholders a 34% premium on shares, with a valuation of £836 million. Despite this, LTG is valued at less than half its 2021 peak market capitalization of £1.8 billion.
General Atlantic’s acquisition rationale considers the current market and macroeconomic uncertainties. They propose that operating as a private company will better facilitate LTG’s strategic goals without the pressures of public financial reporting and the governance and regulatory burdens associated with being publicly traded.
LTG acknowledges challenges in the rapidly evolving educational technology sector, particularly concerning the integration and impact of AI. The company noted that while AI offers opportunities for efficiency, it also threatens certain existing services, requiring significant investment to seize emerging opportunities. The lack of such investment would render LTG’s future even more uncertain.
In September, LTG reported a 12% drop in revenue to £250 million for the first half of the year, attributing these results to inflation and increased AI adoption. This prompted a revision of the company’s full-year revenue guidance, expected to hit the lower end of the £473-493 million range due to exchange rate volatility.
The acquisition reflects a broader trend among UK tech firms departing the London Stock Exchange. This follows notable transactions such as Darktrace’s £4.3 billion purchase and Gresham Technologies’ £147 million acquisition. These moves underscore concerns about undervaluation and the need for reforms to boost investor interest in the UK market. Charles Hall of Peel Hunt stated this trend might continue if reforms are not initiated soon.
The acquisition of Learning Technologies by General Atlantic underscores significant shifts in the UK tech market amid current economic challenges.
