Cloud-based training software program vendor PowerSchool is being taken personal by funding agency Bain Capital in a $5.6 billion deal.
The acquisition is the most recent in a swathe of take-private offers led by personal fairness companies looking for a discount on underperforming enterprise software program companies.
PowerSchool is a web-based platform that helps academic establishments handle operations similar to enrolment, grades, attendance and communications with mother and father and college students. Based in 1997 as a scholar data system supplier for colleges, the corporate was acquired by Apple in 2001 for $62 million in Apple inventory, a determine that will be value round $26 billion right this moment as Apple grew right into a $3 trillion firm.
Apple subsequently bought PowerSchool to Pearson 5 years later, which in flip bought it on to Vista Fairness Companions in 2015, and Canadian personal fairness agency Onex Companions joined as investor three years later. The duo pushed PowerSchool into the general public markets in 2021, with the NYSE itemizing giving the corporate an preliminary valuation of round $3.5 billion.
Within the intervening years, PowerSchool went via the now-familiar pandemic-era peaks and troughs — it surged to a valuation of $5.5 billion in late 2021 earlier than falling to $1.8 billion inside a yr. For the previous couple of years it has hovered at across the $3.5 billion mark.
Bain Capital’s bid weighs in at $22.80 per share in money, representing a 37% premium on PowerSchool’s Might 7 closing share worth of $16.64 — the date when rumors emerged that Bain Capital was eyeing an acquisition. These rumors additionally surfaced as PowerSchool reported robust Q1 2024 earnings, with revenues up 16% year-on-year to $185 million, and analysts predicting the corporate would attain profitability this yr.
With take-private offers similar to this, it’s all about recognizing firms with potential and serving to them attain that potential away from the pressures of the general public markets. That’s what Bain is doing right here with its majority funding in PowerSchool.
“As demand for K-12 educational technology grows, we believe there are significant opportunities to expand access to PowerSchool’s best-in-class product suite around the world,” Bain Capital accomplice Max de Groen mentioned in an announcement.
There was a spate of comparable offers thus far in 2024. Final month, U.Okay. personal fairness agency Permira revealed it was doling out $6.9 billion to take Squarespace personal. Elsewhere, Thoma Bravo mentioned it was taking cybersecurity firm Darktrace personal in a $5 billion deal and paying $1.8 billion for crucial occasion administration software program firm Everbridge. Income optimization platform Mannequin N can be being taken personal by Vista Fairness Companions for $1.25 billion.
Bain Capital mentioned it expects to shut the PowerSchool acquisition within the second half of 2024, topic to the standard regulatory and shareholder approvals. Current traders Vista and Onex will retain minority investments in PowerSchool as soon as the deal concludes.
