PLATO Learning, a leading provider of computer-based learning solutions for all students from kindergarten through adulthood, announced plans to merge with educational software provider Lightspan Inc. in an all-stock deal. The agreement, announced Sept. 9, is subject to the approval of shareholders from both companies.
Assuming it is approved, the deal would create a combined company with a significant presence in elementary education. PLATO Learning already claims to be the leading provider of educational software to high schools, and its addition of Lightspan and the company’s elementary reading products will allow PLATO to challenge Pearson Education for prominence in the lower grades as well, company officials said.
The deal also would unite Lightspan’s Academic Systems products with PLATO’s community college products to establish one of the largest providers of online content for under-prepared college students, officials added.
Lightspan founder, chairman, and chief executive John Kernan will remain active as a board member of the combined companies and will be involved in the integration of the entities under a two-year consulting and non-competition agreement.
Lightspan generated revenues of $50 million in its most recent fiscal year. The merger is expected to modestly reduced PLATO Leaning’s earnings per share in its fiscal year ending in October 2004, but is expected to increase reported earnings by the following year.