Click2learn and Docent Inc., both leaders in the business performance and learning market, announced last week that they will merge into one company that will be a clear industry leader with a complete solution suite, more than 600 customers and over $40 million in cash. This will be a strategic merger of equals intended to create the largest and strongest solution provider.
Kevin Oakes, CEO of Click2learn, said that both Docent and Click2learn recognized that there was no clear leader in the technology platform space of the industry, although this technology is considered to be mission-critical by most organizations doing business with the two companies. “From my perspective, I felt that somebody had to make a bold move in this industry, and I was determined I wasn’t going to be on the outside looking in,” said Oakes. “We felt that this was absolutely the right thing that had to happen in the industry, It was really born out of, more than anything, a business decision to make sure that we had a clear leader.”
“Importantly, we realized that not just any two companies could come together to create the clear leader in the industry—it had to be the right two,” said Docent CEO, R. Andrew Eckert. “While other companies in our industry have been faltering, Docent and Click2learn have been the only two with strong, positive momentum. If you look at the large, bellweather deals in our industry this past year—Nestle, NCR, BMW North America and Microsoft to name a few—they have all gone to Docent and Click2learn. Over the past year, our valuations have increased by more than 100 percent, while our other publicly traded competitor has dramatically fallen. Our teams have similar philosophies and cultures that will help us ensure we are able to maintain this leadership momentum as we integrate the new leader.”
Oakes will continue to serve as a leader of the new company, as president, while CEO and president of Docent, R. Andrew Eckert, will serve as CEO of the combined company.
The combined company will be able to offer a complete, integrated software suite that will include learning management, learning content management, analytics, virtual classroom, knowledge management, collaboration and performance management.
Combined, the two companies have the largest customer base in the industry, with more than 600 enterprise customers. Oakes said that the combined company will have 35 percent of the Global 50 and 40 percent of the Fortune 50 as customers, in addition to a significant percentage of the Fortune 500. “Those organizations don’t want to do business with a vendor who might go out of business in the near term, and they want to make sure that they have the strength and the viability to be around long-term because enterprise technology is about trusting that provider to do the right thing and be there long-term to support that client,” said Oakes. “Together, we’ll have well over $40 million in cash. We believe we will be profitable quickly. We feel very strongly about the 600 customers that we’ve got together, which is almost triple our nearest competitor.”
In addition, the combination of the two companies will create an extensive network of strategic partners, including organizations in the systems integration, content provider and outsourcing fields, such as Accenture, Deloitte, IBM, Microsoft and Thomson Learning.
According to Oakes, a number of synergies between the two companies made the merger a logical choice. For one thing, the combined company will be able to offer an integrated product suite, lowering costs for the organizations implementing the technology. “We both feel very strongly that organizations as they move to this technology and use it in mission-critical ways recognize that there’s a lower total cost of ownership when it’s all integrated and working from the same suite or the same platform,” Oakes said. “I think a lot of companies today are still wrestling with loosely integrated products from different vendors who are on different product development cycles and have different support structures, etc. And when it’s all coming from the same vendor, and it’s on the same code base and same database, the total cost of ownership is much lower and really the headache factor is lower as well.”
The $64,000 question, Oakes said, has centered on the name of the new company, which has not yet been announced. He said that when he and Eckert got together with the management team and started talking, they all felt the merger signified a new beginning. “This has moved beyond e-learning,” Oakes said. “This is business performance management, or whatever you want to call the category. It’s about improving the overall performance of the business and the productivity of that business. So we think it’s much more strategic than e-learning, and a new name will help signify that.”
For more information on the merger, go to Docent’s Web site at http://www.docent.com or Click2learn’s Web site at http://www.click2learn.com.
Emily Hollis is associate editor for Chief Learning Officer Magazine. She can be reached at ehollis@clomedia.com.
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