Bain Capital LLC is buying educational software provider PowerSchool Holdings Inc. PWSC-N in a US$5.6-billion deal that will see the publicly listed company taken private.
Bain said Friday it will pay US$22.80 a share for PowerSchool, which the investment firm said is a 37-per-cent premium to the share price on May 7, the day before media reports emerged about the deal, sending the stock price higher.
Toronto-based private-equity firm Onex Corp. ONEX-T owns 43 per cent of PowerSchool and U.S.-based Vista Equity Partners holds close to a 21-per-cent stake, according to a PowerSchool filing as of April, 2024. The company filing also lists the Canada Pension Plan Investment Board as owning a 6-per-cent stake.
Onex would not say Friday whether it would sell any of its stake to Bain, but both Onex and Vista Equity confirmed they will continue to have a minority investment after the sale is complete. According to Onex’s first-quarter report for 2024, it originally invested US$295-million into the California-based tech company in 2018.
Bain said the PowerSchool board has approved the merger agreement and shareholders holding a majority of the outstanding voting shares also approved the deal by written consent, which means no further shareholder approval is required.
Educational technology provider PowerSchool specializes in cloud-based software for students in kindergarten to Grade 12, with more than 17,000 customers in more than 90 countries.
In 2021, Onex and Vista took PowerSchool public with an initial offering of almost 40 million shares at a price of US$18 each on the New York Stock Exchange.
Pending regulatory approvals, Bain’s takeover deal is expected to close in the second half of 2024. Once complete, PowerSchool will become privately held. PowerSchool said its operations will not be affected by the sale.
Pippa Norman