SkillSoft to Acquire NETg

Oct 27, 2006

SkillSoft PLC, a provider of content resources and complementary technologies for integrated enterprise learning, has signed a definitive agreement to acquire NETg from The Thomson Corporation. Under the terms of the agreement, unanimously approved by the board of directors of SkillSoft and also by The Thomson Corporation, SkillSoft will pay approximately $285 million to acquire NETg.

Under the terms of the acquisition agreement, SkillSoft expects to issue approximately 11.1 million SkillSoft ADSs and $216 million in cash to Thomson, subject to certain adjustments at closing. The cash portion of the consideration will be financed through available cash balances and committed bank financing from Credit Suisse of approximately $180 million. SkillSoft retains the right to substitute additional cash at closing in exchange for ADS's to be delivered, at a value of $6.24 per share.

In connection with the transaction, SkillSoft will convert revenue recognition practices relating to all NETg subscription agreements to pro-rata revenue recognition as well as net accounting for custom contracts where appropriate, consistent with SkillSoft's financial reporting practices. The acquisition is estimated to close in the first half of calendar 2007 (fiscal 2008). Credit Suisse is acting as financial advisor to SkillSoft on the transaction. WilmerHale provided legal counsel to SkillSoft on the transaction.