Instructure to Sell Bridge for $50M and Exit Corporate Learning Market

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Where Instructure planned to go with Bridge, its learning management system for corporate and enterprise customers, has been an open question for over a year, when the company was still publicly traded.

On a call with investors in October 2019, former CEO Dan Goldsmith expressed disappointment with the growth of the business, and said “nothing is off the table” in response to speculation about a possible sale of Bridge.

Much has changed since. Goldsmith is no longer CEO, and the Salt Lake City-based company is now privately owned by private equity firm Thoma Bravo. And over the weekend, the company has finally decided where Bridge is going: across the Atlantic.

Instructure announced it has reached an agreement to sell Bridge to Learning Technologies Group, a London, U.K.-based provider of digital learning and talent development tools for businesses and employees. LTG will pay $50 million in the all-cash acquisition, which is expected to be complete on Feb. 26.

According to other financial terms of the deal, Bridge currently serves more than 800 customers and generated $21 million in revenue last year, of which more than 90 percent came from recurring clients. Still, the business posted a $1.3 million loss.

Launched in 2015, Bridge marked Instructure’s attempt to replicate its success with Canvas, a LMS for higher education, in the corporate learning space. But the two markets are very different, as industry analysts like Michael Feldstein have pointed out. Among the challenges: the LMS is not as “mission critical” to companies that often cut training budgets during economic downturns. Corporate learning is also a large and fragmented market, with many more competing providers than in higher education.

One of those competitors is LTG, which has been rapidly expanding its suite of workforce learning tools since its founding in 2013. Bridge marks its seventh acquisition since LTG raised £81.8 million in a private placement in May 2020. These purchases include Open LMS, a Moodle LMS service provider formerly owned by Blackboard.

For 2020, LTG expects revenues to reach at least £131 million (approx. US $182 million) for, and an adjusted earnings of £40 million (US $55.6 million)

“Bridge adds real strength and depth to our learning and talent offering for the mid-enterprise market, which has attractive structural dynamics,” said LTG CEO Jonathan Satchell in a prepared statement. “The acquisition extends LTG’s current market coverage, enabling us to meet the needs of customers of all sizes and complexities.”

For Instructure, the deal will mark the end of its ambitions in the corporate learning market. But that shouldn’t be surprising. When the company laid off about 100 employees last January ahead of its eventual sale to Thoma Bravo, the majority of those cut were working on Bridge.

A spokesperson for Instructure says the sale will enable the company to focus exclusively on K-12 and higher education, and continue to pursue acquisition opportunities in these markets. To date, Instructure has acquired four companies, the most recent of which was Certica Solutions, a provider of K-12 assessment and analytics tools that it scooped up in a transaction last December.

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