Buyout firm Bain Capital will take PowerSchool Holdings private in a deal valuing the education-software provider at $5.6 billion, PowerSchool said on Friday.
Bain Capital will pay $22.80 per share in cash to PowerSchool shareholders. Existing investors Vista Equity and Onex will continue to have minority interest in the company after the deal closes.
The offer price is 37% higher than PowerSchool’s close on May 7, a day before Reuters reported its talks with Bain for a potential deal.
The buyout comes at a time when private equity-led deals are showing signs of a pick up, following a slowdown last year due to high interest rates that made debt financing for leveraged buyouts more expensive.
Last month, a PE consortium led by Clearlake Capital and Francisco Partners agreed to acquire the software integrity unit of chip designer Synopsys for $2.1 billion.
Folsom, California-headquartered PowerSchool provides cloud-based software for K-12 education in North America and has more than 17,000 customers in over 90 countries.
Vista Equity acquired the company in 2015 and a few years later Onex invested in the firm. PowerSchool listed its shares in New York in 2021.
“With Bain Capital’s support, PowerSchool will have access to additional resources and the flexibility to deliver even more growth and innovation,” PowerSchool CEO Hardeep Gulati said.
PowerSchool’s board has approved the deal, which is expected to close in the latter half of this year.
Debt financiers for the deal include Ares Capital Management, HPS Investment Partners, Blackstone Alternative Credit Advisors and Blue Owl Credit Advisors.
Goldman Sachs & Co LLC, Kirkland & Ellis LLP, Centerview Partners LLC, and Freshfields Bruckhaus Deringer LLP advised PowerSchool on the transaction.
PowerSchool’s shares were unchanged after the announcement. As of last close, its market cap was $4.56 billion, according to LSEG.
Source: Reuters.com