Situation
KnowledgePool, an ICL subsidiary, is a leading European provider of e-learning, information technology (IT) and business skills training to corporate customers, government agencies and IT professionals through instructor-led classes and through its e-learning service. In April 2000, KnowledgePool retained ARC Associates to advise the company in its merger and acquisition activities. As part of KnowledgePool's aggressive growth plans, ARC evaluated a number of acquisition targets in the US and Europe to fill gaps in KnowledgePool's e-learning portfolio.
Approach
Maxim Training ("Maxim") is one of the UK's leading independent developers of CD-ROM and online multimedia training in personal and management skills for the corporate market. Maxim was an existing partner of KnowledgePool when the two companies began discussions in May 2000 about a closer partnership. In early June, ARC Associates and KnowledgePool agreed that the acquisition of Maxim would be an integral part of KnowledgePool's online diversification and inorganic growth initiatives. As such, ARC Associates made an indicative approach to the Maxim shareholders and advisers. At the time of the approach, Maxim had retained a corporate finance adviser to raise external finance to execute its aggressive growth strategy. In early July, the companies agreed a non-binding letter of intent with a 45-day period of exclusivity. ARC Associates negotiated the heads of terms with Maxim and assisted in the negotiation of the share purchase agreement and employment agreements with the shareholders and key management. ARC Associates also assisted in the commercial due diligence.
The Transaction
KnowledgePool purchased Maxim Training Solutions Limited and Maxim Training Consultants Limited for a combination of cash, loan notes and loan notes convertible into KnowledgePool shares. Final terms were agreed in early August and the transaction closed on 18 August 2000. The transaction was the second acquisition completed within one month in which ARC Associates was advising KnowledgePool.