Bain Pursues Takeover of Education-Software Provider
Takeover could value PowerSchool at around $6 billion including debt
The Deal
Bain Capital is in talks to take education-software provider PowerSchool private.
The Details
A deal for PowerSchool could come together in the coming weeks, according to people familiar with the matter. It is still possible that talks could fall apart and not result in a transaction.
The deal is likely to value PowerSchool, whose shares closed Tuesday at $16.64, somewhere in the $20s per share, one of the people said. That would value the company, which had a market cap of about $3.4 billion on Wednesday morning, at about $6 billion including its debt of nearly $1 billion.
Folsom, Calif.-based PowerSchool provides software for K-12 education across North America. The company offers cloud-based products for schools to manage student data, enrollment and attendance. PowerSchool supports over 55 million students and more than 17,000 school districts and states.
PowerSchool was acquired by private-equity firm Vista from Pearson in 2015. In 2018 Onex said it had invested in PowerSchool alongside Vista, making them equal equity partners. The company went public in 2021. Vista and Onex still own stakes.
The Rationale
The deal would come at a time in which private-equity firms are looking to become more active making purchases after a period of dormancy caused in part by elevated interest rates. At the same time, they are eager to sell holdings to return capital to their backers.
Bain, based in Boston, recently announced that it has agreed to sell payroll and HR software provider Zellis Group to Apax Partners. In December it purchased consulting-services company Guidehouse from Veritas in a $5.3 billion deal.
Overall, private-equity deals are on the upswing compared with a very quiet 2023. So far this year they have struck $97.8 billion of leveraged buyouts, compared with $53.7 in the same period in 2022, marking an 82% increase, according to data provider Dealogic.
The Context
On Tuesday, PowerSchool said that its revenue increased 16% year-over-year to $185 million in the first quarter. It had a loss of $22.8 million.