The top five performers year-to-date in the Training Segment are shown below.

Deal Round-Up

Despite the uncertainties of the economic environment, deal activity continues strong in the Human Capital sector. Below we highlight a number of recent transactions including:

• FTI Consulting
• The Riverside Company and WIZ Korea
• Adecco SA and DNC de Nederlanden Compagnie N.V.
• Kelly Services and Toner Graham Limited
• Inscape Software
• Rosetta Stone
• Bedford Funding and Authoria Inc. 

Bedford Funding and Authoria Inc.

On 9/30/08 Bedford Funding of White plains agreed to acquire Authoria Inc., a Waltham, Mass. provider of talent management solutions, for $63.1 million. Founder Tod Loofbourrow will continue to lead Authoria as its CEO.

Authoria had raised around $140 million in venture capital and debt funding since 1998, from firms like Menlo Ventures, Norwest Venture Partners, Austin Ventures, Van Wagoner Capital Management, CIBC Capital Partner, Horizon Technology Finance and Velocity Financial Group. This included a $22.5 million infusion last October.

Bersin & Associates recently sized the market for Talent Management Suites at $2.3 billion in 2008 with a 20-percent annual growth rate, yet noted that the market opportunity largely remains untapped. Authoria recently announced 93-percent year-on-year bookings growth in the second quarter of 2008.

"The critical talent challenges facing all industries – including leadership development, talent shortages, difficulty in filling key roles, and creating a performance-driven culture – are fueling the growth of integrated talent management solutions. We see this market as the next big software opportunity,” said Josh Bersin, President of Bersin & Associates, a research and advisory firm. “The timing is also right as large organizations are eager to leverage technology to integrate all facets of talent management.”    

Rosetta Stone Inc

On 9/24/08 Arlington-based language learning software provider filed for a $115 Million IPO. The company plans to trade on the NYSE with the ticker symbol RST. Morgan Stanley and William Blair & Co are underwriting co-leads. Rosetta Stone was acquired in a 2006 management buyout by ABS Capital Partners (46.1% pre-IPO stake) and Norwest Equity Partners (30.1%).

The company has grown revenue from the predecessor's $15.5 million in 2003 to $137.3 million in 2007. The filing states this represents a 73% compound annual growth rate which the company presents as entirely organic.

Inscape Software(f.k.a. HR Alloy Group Inc.)

On 9/4/08 Inscape Software announced it has raised C$ 7 million in Series B funding, led by Solidarity Fund QFL, a Montreal-based investment fund focused on economic development in Quebec.

Montreal-based Inscape provides on-demand integrated recruitment and assessment solutions for human resources professionals and consulting firms in Canada and the US. The funding will be used to further develop SaaS technology to enable faster science-based staffing evaluations for Inscape client use in employee hiring, development and succession decisions.

Series A investors who also were return participants included Rho Canada Ventures, L.P., Rho Investment Partners Canada, L.P. and Garage Technology Ventures Canada L.P., all Montreal-based.

Kelly Services Inc (Nasdaq: KELY.A) and Toner Graham Limited

On 9/2/08 Kelly Services completed the acquisition of U.K.-based recruitment consultancy Graham Toner. The company was founded in 1994 and provides interim and permanent financial executives for start-ups and established companies of all sizes.

This acquisition will result in Toner Graham's management team leading the business segment of Kelly Services U.K. Financial terms of the deal were not disclosed.

Adecco SA (VIRTX:ADEN) and DNC De Nederlanden Compagnie N.V. (ENXTAM:DNC)

On 9/1/08 Adecco made a tender offer of € 55.23 million to acquire DNC from Chief Executive Officer Koos de Vink and Keijser Capital Asset Management. Certain large shareholders, including Mr. Koos de Vink and Add Value Fund fully support the offer and represent approximately 80% of the outstanding shares. The termination fee is € 1.25 million. The Supervisory Board of DNC unanimously supports the intended offer and is expected to recommend shareholder acceptance.

The Riverside Company and WIZ Korea

On 8/11/08 Riverside announced its purchase of WIZ Korea, Korea’s largest preschool education franchise, for undisclosed terms. WIZ Korea, headquartered in Bundang near Seoul, operates 53 franchises and three company-owned locations, with all but four located within Korea. The play-based curriculum focuses on developing the technical and social skills of children between the ages of two and seven.

Riverside has acquired four franchising firms and 10 educational and training firms. WIZ Korea becomes Riverside's 20th acquisition of the year.

FTI Consulting, Inc. (NYSE: FCN)

On 8/6/08 FTI Consulting of Baltimore, best known as a provider of advisory services to companies facing reorganization, announced a plan for an IPO spin-off of its Technology division that specializes in automated e-discovery software used in litigation and corporate transaction activities.

In its Q2 earnings report on 8/5, FTI's Technology segment produced $56.3 million in revenue during the three months ending in June, about 17% of the company's total sales. Sale of a minority investment in the Technology division, valued at $600-700 million, is projected to place in an IPO before the end of the year.

FTI acquired more than 10 companies in 2008 to date, reducing its 2007 year-end cash reserves of $360 million to half that by the end of June. The hundreds of millions this spin-off could produce would position FTI for continued acquisitions.