William Blair & Company Initiates Coverage of SkillSoft PLC With Outperform Rating

Business Wire, March 7, 2008

CHICAGO -- William Blair & Company initiated research coverage of SkillSoft PLC (Nasdaq:SKIL) ($8.79), a provider of e-learning courseware and performance support solutions for more than 3,000 business, government, and education clients worldwide, with an Outperform rating and Core Growth company profile.

Analyst Brandon Dobell estimated that the company would generate diluted EPS (GAAP) of $0.25 in fiscal 2008, $0.38 in fiscal 2009, and $0.57 in fiscal 2010.

"SkillSoft is one of the top players in the growing, highly fragmented e-learning industry," Dobell said. "Over the next three to five years, we expect e-learning to continue to slowly take share from internal and classroom-based delivery channels. We are modeling annual revenue growth at SkillSoft of 10%-12% and look for the operating margin, excluding nonrecurring and noncash charges (but including stock-based compensation), to expand from 21% in fiscal 2008 (January) into the upper-20% range."

"We believe the May 2007 NETg acquisition will drive significant operating margin improvement in the coming years," he added. "NETg appears to be an excellent strategic fit, as it gives SkillSoft an additional 1,000 customers ( 50%) with only a 10% increase in the salesforce and increases the breadth and depth of the company's product offerings. We expect NETg to provide SkillSoft with significant cross-selling opportunities and note that the acquisition removes a significant price-competitive nuisance for SkillSoft."

William Blair & Company, L.L.C. has received compensation for investment banking services from the company within the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next 3 months.

William Blair & Company, L.L.C. is a market maker in the security of this company and may have a long or short position.

William Blair & Company, L.L.C. (www.williamblair.com) is a Chicago-based investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost.

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