Training Industry Magazine - May/June 2021 - 54

CLOSING
DEALS

$3.8 BILLION ACQUISITION DEMONSTRATES THE
VALUE OF ONLINE TECHNICAL TRAINING IN 2021
BY TARYN OESCH DELONG, CPTM

Last December, Pluralsight announced
that Vista Equity Partners would acquire
it for $3.5 billion - by our calculations,
the largest reported sale of a training
company in industry history (although,
notably, Coursera's recent initial public
offering valued the company at over
$7 billion). In March, the company
announced a revised agreement with an
11% increase over the original agreement:
$22.50 per share instead of $20.26 per
share (about $3.8 billion).

to do with new free time, searched for
eLearning opportunities like the ones
Pluralsight offers through its individual
course offerings. Companies, looking to
pivot from in-person training to remote
learning, searched for partners that
would make it easier for them to do so
through enterprise offerings - again,
positioning Pluralsight to gain even
greater market share.

Pluralsight, which describes itself as a
" technology workforce development
company, " offers technical skills
development
and
engineering
management solutions. The company
has also recently announced a
couple acquisitions of its own:
DevelopIntelligence, provider of skills
consulting and virtual instructorled training (VILT) for information
technology (IT), software development
and engineering teams, and Next Tech,
a cloud-based computing environment
provider that enables the authoring and
hosting of labs for hands-on software
development, data science and machine
learning training.

THE DEMAND FOR
SKILLED SOFTWARE
ENGINEERS CONTINUES
TO OUTSTRIP SUPPLY.

A PERFECT STORM
As a TechCrunch article pointed out,
the demand for skilled technical
professionals was high even before the
pandemic, but the shift of many teams
to remote work last year drove online
learning consumption through the roof.
Individual learners, looking for ways
to boost their careers in a challenging
economy or simply looking for something

| 54

Technical skills gaps, meanwhile,
proved to be even more troublesome in
a remote workplace, where difficulties
with connectivity, remote collaboration
and cybersecurity were exacerbated
by distance and home networks. In fact,
Training Industry research found that
the technology industry increased its
use of virtual instructor-led training from
29% to 39% and self-paced eLearning
from 29% to 34% of their training after
the start of the pandemic.
" We have seen firsthand that the
demand for skilled software engineers
continues to outstrip supply, and we
expect this trend to persist as we move
into a hybrid online-offline world across
all industries and interactions, " said
Monti Saroya, co-head of the Vista
Flagship Fund and senior managing
director at Vista, in the initial press
release announcing the acquisition.

WHY SO MUCH?
With a 2020 revenue of just $391.9
million, why did Vista Equity Partners
invest so much in Pluralsight? Ken
Taylor, president of Training Industry,
Inc., believes it's because Pluralsight
has the potential to be " more than just
a collection of courses " and to become
a " delivery platform. " The company
grew by 24% last year, so Vista Equity
Partners is " paying a high multiple for
a high growth rate company " that it
likely believes will enter more markets,
he says. Plus, $391.9 million is nothing
to sneeze at in the training industry,
particularly in such a niche market.
" Pluralsight has good margins because
they primarily sell digital learning, "
Taylor adds, though with a cautionary
note:
Skillsoft,
another
online
learning company, filed for Chapter
11 bankruptcy last year before being
acquired by Churchill Capital Corp II
and merged with IT training company
Global Knowledge. What's to stop
the same thing from happening to
Pluralsight? " Why won't the cost of
maintaining the catalog become so big
and so unruly and so difficult to manage
that they end up with the same kind
of problems? "
Taylor points out that we'll have to wait
to find out, but with the future of learning
shifting ever more toward digital,
Pluralsight seems to be well aligned with
what's to come.
Taryn Oesch is the managing editor of
digital content at Training Industry, Inc.
Email Taryn.
Training Industry Magazine - May/June 2021

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