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CertTalk.com > Certification News > Smart Certify Closing Its Doors?
| Smart Certify Closing Its Doors? |
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Posted by Ice on Mar, 18 2005 - 10:16 (2 comments)
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According to sources Skillsoft swung a mean scythe at their Smart Certify division, cutting an unknown number of employees. A quick check on the Skillsoft web site mined this gem from a press release dated Monday, March 14th 2005. Apparently a deal is imminent to sell Smart Certify to an unknown suitor, but if the deal isn't consummated, SkillSoft plans to shut them down. The release did say that any current contractual obligations would be serviced and fulfilled, and in the case of a sale would continue a reseller arrangement with the new company. There is a plan to shut down SmartCertify completely if the sale does not go through.
What does it mean for the IT certification industry? Many companies have experienced significant loss of revenue since the heydeys in the late 90's, however just as Transcender was asset sold this time last year, another heavyweight in the industry felled would shake the industry to its core.
SMARTCERTIFY SUBSIDIARY PENDING SALE TRANSACTION
"The Company has entered into a non-binding letter of intent with respect to the sale of its retail IT certification business, SmartCertify. In the event the transaction is not consummated as anticipated, the Company will shut down the operation. As previously noted in our fiscal 2005 third quarter earnings release, the SmartCertify IT Certification focused direct-to-consumer business has contributed less revenue than expected. This planned action will allow us to fully focus our attention and resources on our core enterprise business. The Company engaged an investment banker to assist it in eliciting acquisition proposals for this business and has progressed discussions with a buyer to the point where the Company expects to consummate a transaction in the fiscal 2006 first quarter. The Company is now working on finalizing sale terms with the potential purchaser. If SmartCertify is sold, SkillSoft will maintain a reseller arrangement with the new organization. If the Company were to shutdown the operation, a plan to do so would be established. Such plan would outline a timeline and schedule of costs associated with the shutdown. The Company would not maintain a reseller arrangement under a shutdown scenario. In either a shutdown or a sale scenario, the Company will maintain the existing customer contracts and service those contracts until the contractual obligation is fulfilled. This decision process is expected to be finalized in the first quarter of fiscal 2006. The current fiscal 2006 financial targets, detailed below, assume SmartCertify’s full operation for the fiscal 2006 first quarter and a reseller arrangement for the remaining three quarters of fiscal 2006. The accounting for this transaction is currently being reviewed, and any effect on the fiscal 2005 or 2006 earnings outlook would be announced after the finalization of the transaction. Whether SmartCertify is sold or shutdown, the Company anticipates recognizing revenue from the deferred revenue balance related to direct-to-consumer business over the succeeding 18 to 24 months following the sale or shutdown. Substantially all of the sales, marketing and administrative costs, on a going forward basis following a sale or shutdown, will be eliminated."
The certification industry has experienced considerable shrinkage in the last four or five years, mostly due to the loss of IT jobs to economic restructuring such as offshoring and outsourcing. What growth there is seems to be the province of smaller companies with business models more suited to a market slowdown. If one was to use advertising exposure as an indicator, those companies would include ExamForce, Train Signal, Boson and others. Each has a different set of offerings and business model, but seem to be thriving while the giants of this market niche continue to falter.
We'll keep you informed as more information becomes available. For the original release, go to http://www.skillsoft.com/news/press...cial_target.asp
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Post a comment (2) »» |
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| #1 Posted by Ice (81 posts) at 18 Mar 2005 - 10:17 |
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Any body got any details, post em here or in the forums. I'll start a forum thread
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| #1.1 Posted by freddiebeach (9 posts) at 19 Mar 2005 - 17:28 |
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People in SkillSoft are being very tighted lipped on this one. Called a few friends and I wasn't able to find anything else. I know in the past the SmartCertify accounted for a large portion of the sales of SmartForce/SkillSoft. This has obvisously changed.
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