Codecademy Acquisition: Key Details, Impact, and What Comes Next

Skillsoft's acquisition of Codecademy for $525 million marks a significant moment in the educational technology sector. This strategic move aims to enhance Skillsoft's capabilities in technical skills training, creating a global community of over 90 million learners. The merger is expected to drive growth and innovation, benefiting both individual learners and enterprise clients.

What Is Codecademy?

Founded in 2011, Codecademy offers guided paths and interactive lessons in in-demand topics such as AI, data, cloud, and cybersecurity. The platform prepares learners for industry certifications from AWS, Microsoft, and CompTIA, among others. Unique features include AI-assisted learning, real-world project simulations, and a job-readiness checker. Codecademy also provides an interview simulator and hands-on learning experiences, making it a comprehensive tool for both individual learners and businesses.

Who Acquired Codecademy?

Skillsoft is a leading provider of online employee training and learning platforms, focusing on transforming workforce capabilities through personalized learning paths, AI-powered coaching, and real-time insights. Key products include Skillsoft Percipio, an advanced learning platform, and Skillsoft CAISY™, an AI-powered coach. The company also offers programs in leadership, technology, compliance, and ethics. Skillsoft is recognized for its comprehensive and innovative solutions, making it a trusted partner for organizations aiming to enhance their workforce's skills and capabilities.

When Was Codecademy Acquired?

Skillsoft announced its acquisition of Codecademy on December 22, 2021, and completed the transaction on April 5, 2022. This acquisition came at a time when the educational technology sector was experiencing significant consolidation, driven by the increased demand for online learning solutions during the pandemic. The timing also aligned with Skillsoft's strategic growth plan, which included previous acquisitions to enhance its capabilities in the high-growth Technology & Developer segment.

Why Was Codecademy Acquired?

• Market Expansion: The acquisition of Codecademy significantly expands Skillsoft's reach, creating a global community of over 90 million learners. This move allows Skillsoft to leverage Codecademy's strong presence in the consumer market and expand into new regions, including India, where there is a high demand for engineering education.
• Technology Integration: Codecademy's platform offers interactive, self-paced courses in 14 programming languages, which will be integrated into Skillsoft's existing offerings. This integration enhances Skillsoft's ability to meet the evolving demands of learners worldwide, providing a comprehensive technical learning platform that supports both individual and enterprise education.
• Competitive Advantage: The acquisition strengthens Skillsoft's position in the market by combining Codecademy's expertise in consumer education with Skillsoft's established presence in the B2B sector. This creates a leading technology and developer offering, allowing Skillsoft to address critical technical skills gaps and drive customer growth through substantial cross-selling and upselling opportunities.

Acquisition Terms

• Acquisition Price: Approximately $525 million.
• Payment Method: The transaction was a mix of cash and stock, with approximately 40% in cash and 60% in equity.
• Key Conditions or Agreements:
  • The transaction required approval by Skillsoft shareholders.
  • Satisfaction of customary closing conditions.
  • Receipt of regulatory approvals, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
  • Skillsoft secured committed financing from Barclays and Citigroup.
  • Pro-forma net leverage at closing was expected to be approximately 4x.
  • Codecademy’s founder and CEO, Zach Sims, joined Skillsoft’s executive leadership team.

Impact on Codecademy

The acquisition of Codecademy by Skillsoft has led to significant changes in operations and management. Codecademy's team, including founder Zach Sims, has joined Skillsoft's executive leadership, aiming to accelerate growth in the Technology & Developer segment. This integration is expected to enhance Skillsoft's capabilities by incorporating Codecademy's interactive, self-paced courses into its existing offerings. The combined entity will leverage Skillsoft's B2B presence to scale Codecademy faster and create a comprehensive technical learning platform for both individual learners and corporate clients.

Product offerings and services have also seen notable enhancements. Codecademy's platform, known for its interactive courses in 14 programming languages, will now be part of Skillsoft's immersive learning experiences. This includes new content areas like cloud computing and DevOps, as well as the introduction of new learning modes such as coaching and in-person training. Employee reactions have been positive, with no layoffs reported, and customers are expected to benefit from the enriched learning solutions. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.