SumTotal acquires Pathlore

SumTotal is to acquire Pathlore for approximately $47 million. Pathlore shareholders will receive approximately $29 million in cash and 4 million shares of SumTotal Systems common stock. The merger is the latest in a string of deals and take overs as the e-learning industry consolidates.

SumTotal said the move "reinforces the company's position as the largest software provider in the emerging learning and performance management market and is expected to provide its collective customers even greater resources for support and product innovation."

According to industry analysts, the acquisition brings together the market leader by revenue and the market leader by customer count. The deal should give Pathlore customers access to SumTotal's enterprise suite of product capabilities and expanded global support. The two companies claim the move will extend SumTotal's reach into key segments, including state government, health care, and the rapidly growing middle-market.

The combined company should have over $100 million in expected annualized revenue over and over 1,500 customers worldwide.

Andy Eckert, CEO of SumTotal, said "After surveying our industry's landscape, it became evident that Pathlore had a tremendous amount of momentum in complementary markets. We believe that its growth, significant revenue base, and profitability profile could help us reach a critical threshold of revenue scale and profitability for our customers, partners and investors.

"With similar philosophies and cultures, complementary technology and offerings, and an unmatched footprint, we believe the combined company will be the only true enterprise-class player in our industry with the scale to drive innovation and customer satisfaction in a profitable manner."

Steve Thomas, president and CEO of Pathlore said: "We believe the combination of these two strong companies will expand the scope of our operations and ensure that we will have the capabilities and financial strength to successfully serve our customers around the globe.

"We believe strongly that this combination allows us to bring our customers significant value in terms of new capabilities and products. Given the exceptionally large worldwide customer footprint, this combination meaningfully raises the bar for anyone who wishes to compete in our industry."

Janet Way, chief operations officer, of Pathlore reseller The Matchett Group, said: "My feeling is that the acquisition is a great opportunity for us and our customers, we believe that SumTotal are committed to continue to support the Pathlore products for the foreseeable future, but this new larger company allows our customers to take advantage of any new technologies produced,as well as giving them more support in Europe."