Smartforce snaps up Centra for $284m

E-learning giant SmartForce has increased its stronghold on the training market with the $284m (£200m) acquisition of live collaboration software company Centra.

The acquisition, the largest to date in the e-learning industry, follows predictions of widespread company consolidation.

The purchase will add collaboration capabilities, including virtual classrooms and web lectures, to SmartForce's existing content and services offerings.

"There will be many learning applications that will be enhanced by having the Centra suite," said Smartforce senior vice president Paul Henry. "If having almost the entire repertoire of e-learning elements is the endgame, we don't have too many competitors which do that."

But the deal casts uncertainty over SmartForce's partnerships with third-party suppliers. Henry refused to comment on the company's relationship with Centra rival WebEx, and the likelihood of continuing to use the WebEx software internally.

"Centra has partnerships with other e-learning companies and there will be some where it doesn't make sense for us to continue the partnership, and others that don't want to work with us. That's what we're sitting down and assessing at the moment," Henry explained.

Chris Reed, head of corporate strategy at Centra, said: "Self-paced learning has been very successful for IT skills but the combination of the two companies, and the ability to provide a blended solution, can quadruple the level of use of self-paced learning. I've never completed a standalone self-paced learning programme."

The companies already share about 100 customers and, provided the deal goes through, will have a combined annual research and development budget of about $60m.

Integration work between products from the two companies will happen in the next few weeks. "Customers will be able to buy from one company and not compromise on quality," said Reed.

Centra had held back from partnering with SmartForce in the past because of an existing relationship with WebEx. "We were having difficulty getting the innovation we needed to drive that vision forward," explained Reed.

Paul Butler, chief executive at learning services company KnowledgePool, described the acquisition as a "really cute move" for Smartforce.

"With e-learning, the issue is that no one completes courses because they are inherently boring. That's why Smartforce bought Centra - it was the missing link," he said.