Strategic Acquisition Reinvents Skills-Based Learning

The skills gap. Digital transformation. The great resignation. The pink pandemic. The labor shortage. A stagnant minimum wage. And ever rising costs of higher education. Across the globe, business and popular media make dire predictions about the state of work and the workforce.

But, behind the headlines are three simple truths.

1. Technology has changed everything, no doubt.
   
   
2. But, with access to the right opportunity to acquire in-demand tech skills, people can ensure they become — and stay — relevant and employable.
   
   
3. And, the best way for organizations to grow and retain the skills they need to be competitive and profitable, is to build a learning culture that encourages continual skilling, upskilling, and personal and professional growth.
   
   

Through the combination of the new Skillsoft and Codecademy, we can help organizations not only survive, but thrive, by connecting the needs of the enterprise to those of the learners so new skills can be developed at scale, across industries, globally.

Together, we will connect millions of people to new economic opportunities in technology, provide more enterprises with the valuable tools they need to narrow the skills gap, and help drive societal change, making learning and growth more accessible and inclusive.

We will prepare the workforce of today with the skills for tomorrow.

The nature of work — and consequently the nature of the workforce — has evolved at a rapid pace. Today, every company, everywhere, has to rethink how they conduct business and the talent required to rapidly innovate, meet customer needs and employees’ expectations. But the rate of technological change has outpaced organizations’ ability to upskill and reskill their talent.

Until now.

Greatly accelerated by COVID-19, digital transformation is ubiquitous. Every company's success depends on its ability to execute digitally and continue to invest in new technology-driven offerings and operations. That means, we’ve moved into a world where every company needs to engage in the war for tech talent to stay at the forefront of innovation.

The skills gap, predicted years ago, has become a crisis. According to Deloitte, the potential economic impact could reach US $2.5 trillion. How we source, retain, and skill talent has to be revolutionized.

By acquiring Codecademy, Skillsoft will be in a unique position to:

• Help people acquire the skills they need to fill tech roles

• Enable businesses to transform and thrive by skilling existing talent

• Prepare the workforce for the most in-demand jobs of the future

Within this shifting job market, competencies have emerged as the new currency. According to Skillsoft’s recent Skills and Salary Report, 38 percent of IT decision-makers cited the rate of technology change outpacing their existing skills development programs. This was the primary driver identified behind why 76 percent of IT decision-makers worldwide face critical skills gaps in their departments — a 40 percent increase since 2015. A skills-based strategy, supported by Skillsoft and Codecademy will enable organizations to reskill and upskill as needed.

Our Skills and Salary Report found that the top reason IT professionals changed jobs was for opportunity development and growth … not increased compensation. This underscores why talent development is critical to retaining employees and helping them achieve their career goals. And, the global ramifications are massive.

According to the World Economic Forum, closing the skills gap could add US$11.5 trillion to global GDP by 2028.

The need for a skills revolution — especially in technology — has never been greater.

By acquiring Codecademy, Skillsoft will expand its position as a global leader in corporate digital learning. Codecademy's complementary, high-quality technology courses and labs will expand Skillsoft’s Technology and Developer portfolio. Codecademy meaningfully enhances the breadth and depth of the Skillsoft offering, creating a more robust and diverse content library, and delivering an interactive learning platform that can easily extend to support any number of technology-related skills

The acquisition nearly doubles Skillsoft’s reach, bringing an additional 40 million registered learners to the organization’s customer base, and adding sophisticated business-to-people go-to-market expertise to Skillsoft’s robust business-to-business sales engine. At the same time, Skillsoft’s relationships with 70 percent of the Fortune 1000 provides insight into which competencies are most in-demand right now.

The business growth story behind Skillsoft’s Codecademy acquisition is timely and compelling. But, there’s more to it.

Both organizations are mission-driven, united in the belief that a company can deliver both revenue and profits, while still doing good in this world. Together, they are dedicated to ensuring that value-rich education is available to all. That more people around the globe have access to life-changing learning, empowering their professional and personal lives today and tomorrow.

As one company, comprising heritage Skillsoft, Codecademy, and other recent acquisitions, Global Knowledge and Pluma, Skillsoft is better positioned to connect millions of people to new economic opportunities and thousands of organizations to the highly skilled workforce they need.

It’s more than an idea whose time has come. It’s a bold new approach to learning that will transform employers and employees alike.

Additional Information and Where to Find It

This communication may be deemed solicitation material in respect of the proposed acquisition of Codecademy by the Company. This communication does not constitute a solicitation of any vote or approval. In connection with the proposed transaction, the Company plans to file with the Securities and Exchange Commission (the “SEC”) and mail or otherwise provide to its shareholders a proxy statement regarding the proposed transaction. The Company may also file other documents with the SEC regarding the proposed transaction. This document is not a substitute for the proxy statement or any other document that may be filed by the Company with the SEC.

BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY THE COMPANY WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.

Any vote in respect of resolutions to be proposed at the Company’s stockholder meeting to approve the proposed transaction or related matters, or other responses in relation to the proposed transaction, should be made only on the basis of the information contained in the Company’s proxy statement. Shareholders may obtain a free copy of the proxy statement and other documents the Company files with the SEC (when available) through the website maintained by the SEC at www.sec.gov. The Company makes available free of charge on its investor relations website at https://investor.skillsoft.com... copies of materials it files with, or furnishes to, the SEC.

No Offer or Solicitation

This communication is for information purposes only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

Participants in the Solicitation

The Company and its directors, executive officers and certain employees and other persons may be deemed to be participants in the solicitation of proxies from the Company’s shareholders in connection with the proposed transaction. Security holders may obtain information regarding the names, affiliations and interests of the Company’s directors and executive officers in the Company’s Report on Form 8-K and Form 8-K/A filed on June 17, 2021. To the extent the holdings of the Company’s securities by the Company’s directors and executive officers have changed since the amounts set forth in the Company’s Form 8-K filed on June 17, 2021, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such individuals in the proposed transaction will be included in the proxy statement relating to the proposed transaction when it is filed with the SEC. These documents (when available) may be obtained free of charge from the SEC’s website at www.sec.gov and the investor relations page of the Company’s website at https://investor.skillsoft.com....

Forward Looking Statements

This document includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations, the timing and occurrence of the closing of the transaction, and the anticipated transaction benefits. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook, our product development and planning, our pipeline, future capital expenditures, financial results, the impact of regulatory changes, existing and evolving business strategies and acquisitions and dispositions, demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully implement our plans, strategies, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as “may,” “will,” “would,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “projects,” “forecasts,” “seeks,” “outlook,” “target,” goals,” “probably,” or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of Skillsoft’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.

There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including:

• the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability;
• the impact of the ongoing COVID-19 pandemic (including any variant) on our business, operating results and financial condition;
• fluctuations in our future operating results;
• our ability to successfully identify, consummate and achieve strategic objectives in connection with our acquisition opportunities and realize the benefits expected from the acquisition;
• the demand for, and acceptance of, our products and for cloud-based technology learning solutions in general;
• our ability to compete successfully in competitive markets and changes in the competitive environment in our industry and the markets in which we operate;
• our ability to market existing products and develop new products;
• a failure of our information technology infrastructure or any significant breach of security, including in relation to the migration of our key platforms from our systems to cloud storage;
• future regulatory, judicial and legislative changes in our industry;
• our ability to comply with laws and regulations applicable to our business;
• the impact of natural disasters, public health crises, political crises, or other catastrophic events;
• our ability to attract and retain key employees and qualified technical and sales personnel;
• fluctuations in foreign currency exchange rates;
• our ability to protect or obtain intellectual property rights;
• our ability to raise additional capital;
• the impact of our indebtedness on our financial position and operating flexibility;
• our ability to meet future liquidity requirements and comply with restrictive covenants related to long-term indebtedness;
• our ability to successfully defend ourselves in legal proceedings; and
• our ability to continue to meet applicable listing standards.

Additional factors that may cause actual results to differ materially from any forward-looking statements regarding the transaction between Skillsoft and Codecademy include, but are not limited to:

• our ability to timely satisfy the conditions to the closing of the transaction contemplated in the definitive agreement;
• occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement;
• the possibility that the consummation of the acquisition is delayed or does not occur, including the failure to obtain stockholder approval of the transaction;
• our ability to realize the benefits from the acquisition;
• our ability to effectively and timely incorporate the acquired business into our business operations;
• risks that the acquisition and other transactions contemplated by the definitive agreement disrupt current plans and operations that may harm the parties’ current businesses; and
• the amount of any costs, fees, expenses, impairments and charges related to the acquisition; and
• uncertainty as to the effects of the announcement or pendency of the acquisition on the market price of the Company’s common stock and/or on the parties’ respective financial performance.

The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see the risk factors included in the Company’s Amendment no. 1 to its Registration Statement on Form S-1 declared effective by the SEC on July 29, 2021, and subsequent filings with the SEC.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Additionally, statements as to market share, industry data and our market position are based on the most currently available data available to us and our estimates regarding market position or other industry data included in this document or otherwise discussed by us involve risks and uncertainties and are subject to change based on various factors, including as set forth above.

Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless required by applicable law. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.