KKR, Francisco Partners vying to acquire Instructure, sources say (updated)

Instructure Holdings

04/07/2024 24:07

(Adds background on Instructure from paragraph 5 onwards)
    By Milana Vinn
       July 3 (Reuters) - Private equity firms KKR  KKR.N  and
Francisco Partners are competing to acquire Instructure
 INST.N , a U.S. education software provider with a market value
of $3.4 billion, people familiar with the matter said on
Wednesday.
    The two buyout firms are through to the final round of
bidding for Instructure and are preparing to submit binding
offers next week, the sources said. 
    There is no certainty that private equity firm Thoma Bravo,
which holds an 83% stake in Instructure, will agree to sell it,
and other bidders could emerge, the sources added, requesting
anonymity because the matter is confidential.
    Instructure, KKR, Francisco Partners and Thoma Bravo
declined to comment.
    Based in Salt Lake City, Instructure provides software to
schools, colleges and universities. It has over 8,000 customers
in more than 100 countries.
        The company's flagship learning management system is
called Canvas and competes with programs such as Google
Classroom, Blackboard Learn and Schoology.
        Thoma Bravo took Instructure private in 2020 for $2
billion before returning it to the stock market a year later
through an initial public offering (IPO). 
        Instructure's shares are hovering just a little over
their $20 IPO price three years later, as a boom the company
enjoyed from spending on remote learning during the COVID-19
pandemic fizzled when competition from rivals intensified.
    Earlier this year, Instructure completed the acquisition of
academic credential management platform Parchment for $835
million. Reuters reported in May that Thoma Bravo had put
Instructure up for sale.
        PowerSchool Holdings  PWSC.N , another educational
software vendor, agreed to be acquired by private equity firm
Bain Capital last month for $5.6 billion. 
        The deal price was equivalent to 7 times PowerSchool's
projected 12-month revenue, within the 7-11 times multiple range
across recent deals in the sector, according to Jefferies
analysts. Instructure currently trades at 6 times 12-month
projected revenue, according to LSEG data. 

 (Reporting by Milana Vinn in New York; Editing by Greg
Roumeliotis and Sonali Paul)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022; Reuters
Messaging: greg.roumeliotis.thomsonreuters.com@reuters.net))