Bain Capital in talks to buy education-software provider PowerSchool, source says

PowerSchool Holdings

08/05/2024 15:30

By Anirban Sen and Priyanka  G
       May 8 (Reuters) - Buyout firm Bain Capital is in talks
to take education-software provider PowerSchool  PWSC.N 
private, a person familiar with the matter said on Wednesday.
    The deal, which is still a few weeks away from getting
signed, is likely to value PowerSchool somewhere in the $20s per
share, according to the source, who requested anonymity as the
discussions are confidential.
    At that price, a deal would value PowerSchool at roughly $6
billion, including debt, based on Reuters calculations.
    Shares of PowerSchool, which has a market capitalization of
about $4.1 billion, jumped as much as 27% in early trading on
Wednesday morning after the Wall Street Journal reported on the
company's talks with Bain.
    A deal for PowerSchool would come at a time when private
equity-led buyouts are showing signs of a pickup, following a
slowdown last year due to high interest rates that made debt
financing for leveraged buyouts more expensive.
    Earlier this week, a private equity consortium led by
Clearlake Capital and Francisco Partners agreed to acquire the
software integrity unit of chip designer Synopsys  SNPS.O  for
$2.1 billion.
    PowerSchool, which is headquartered in Folsom, California,
provides cloud-based software for K-12 education in North
America. It was unofficially started by Greg Porter as a
teenager when he developed record-keeping software at his high
school in 1983. The school in California paid Porter and his
friend $350 for the program.
    Fourteen years later, Porter sold the first version of
PowerSchool Student Information System. In 2001, it was acquired
by Apple  AAPL.O , before its ownership changed hands again in
2006 when it was taken over by Pearson.
    Private equity firm Vista Equity Partners acquired the
company in 2015 and a few years later, buyout firm Onex invested
in the company. The two firms still hold significant stakes in
PowerSchool, which listed its shares in New York in 2021.
    The company now has customers in more than 90 countries and
its software is used by more than 50 million students globally,
according to its website.

 (Reporting by Priyanka G in Bengaluru and Anirban Sen in New
York; Editing by Shounak Dasgupta)
 ((Priyanka.G@thomsonreuters.com))