Yahoo Finance PowerSchool Is Drawing Takeover Interest from Warburg Pincus
(Bloomberg) -- Education software provider PowerSchool Holdings Inc. has drawn takeover interest from private equity firms including Warburg Pincus, according to people familiar with the matter.
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The Folsom, California-based company is engaging with buyout firms and has formed a special committee of its board of directors, which is working with an investment bank, the people added, asking not to be identified because the matter is private.
The company is also in talks about a buyout with Bain Capital, the people said, which was first reported by the Wall Street Journal earlier this month.
While talks are continuing, no final decision about whether to proceed with a transaction has been made and PowerSchool could opt to remain independent, the people said. If talks are successful, a deal could be announced within a few weeks, they added.
PowerSchool said in an emailed statement that it doesn’t comment on rumors and speculation. A spokesperson for Warburg Pincus declined to comment. A representative for Bain didn’t immediately respond to a request for comment.
The company’s shares, which rose as much as 11% on Monday, closed up 4.6% to $20.61 in New York trading, giving PowerSchool a market value of about $4.2 billion. The shares, which had risen less than 5% since pricing its initial public offering in July 2021, had fallen about 16% this year.
PowerSchool, whose customers include most of the largest school districts in the US, offers cloud-based software that help with teacher assessments, hiring and learning management.
Private equity firms Onex Corp. and Vista Equity Partners own about 63% of PowerSchool’s outstanding shares, according to data compiled by Bloomberg.
If it reaches a deal, PowerSchool would be the latest private equity-backed tech company to return to the private markets just a few years after going public.
Vista Equity Partners in January closed its acquisition of General Atlantic-backed payments software vendor EngageSmart Inc., which went public in 2021, while Thoma Bravo said last month it would take UK cybersecurity company Darktrace Plc private for $5.32 billion after only three years on London’s bourse.
(Updates with closing share price in sixth paragraph)
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