Smartforce/SkillSoft merger gets go-ahead

The merger between e-learning companies Smartforce and SkillSoft has been officially approved by shareholders, marking the creation of an online training giant with a market capitalisation of $350m.

The new company, which will trade under the SkillSoft name, will bring together SmartForce's portfolio of IT e-learning content with SkillSoft's business skills e-learning courseware, as well as over 2,500 digitised IT and business books, including content across 15 different languages.

Kevin Young, vice president and managing director at SkillSoft, said: "The demand for high-quality e-learning continues to grow rapidly throughout Europe and we are looking forward to working with our customers to meet more of their business challenges in the months ahead."

He added that growing pressure on corporate training budgets, together with the desire to rationalise supply chains, meant that many customers had welcomed the merger with open arms.

"There's a lot of data that directly correlates between spend on training and staff productivity," he explained.

"There's still a significant commitment to spend on education but a shift is occurring and training and human resources departments are under pressure to get more for their money."

But the culmination of the deal marks uncertainty for the company's 30 existing European channel partners.

Because of the different focuses of the two companies, existing partners tend to sell to either human resources or IT departments.

Young maintained that the company would assess its channel model over the next few weeks.

"We want to minimise disruption to customers but, over the next two to three weeks, we will assess where our strengths lie and try to bring an optimal structure," he said.

"That could mean that partners sell each other's products, but it's too early to say if there would be any consolidation."

Graham Fisher, an analyst with Bloor Research, indicated that the merged company stood to benefit from growing demand for IT professionals with business nous.

"It's no longer enough to be a beautiful mind; you've also got to have a personality and some soft skills," he said.

But Fisher warned that too many companies had failed to get to grips with the concept of e-learning.

"E-learning and training still doesn't get the high profile it deserves," he said. "When you look at job adverts it's almost as if employers demand training but don't give it."