Bain Capital will acquire PowerSchool Holdings (NYSE:PWSC) in a transaction valuing the education software provider at $5.6 billion, as announced by PowerSchool on Friday.
Under the agreement, Bain Capital will pay $22.80 per share in cash to PowerSchool shareholders. Current investors Vista Equity and Onex will retain a minority stake in the company post-acquisition.
The offered price represents a 37% premium over PowerSchool’s closing price on May 7, the day before Reuters reported the company’s discussions with Bain Capital regarding a potential deal.
This buyout occurs amid a resurgence in private equity-led deals, following a previous slowdown caused by high interest rates that increased the cost of debt financing for leveraged buyouts.
In a similar transaction last month, a private equity consortium led by Clearlake Capital and Francisco Partners agreed to purchase the software integrity unit of chip designer Synopsys (NASDAQ:SNPS) for $2.1 billion.
Headquartered in Folsom, California, PowerSchool offers cloud-based software solutions for K-12 education across North America, serving over 17,000 customers in more than 90 countries.
Vista Equity acquired PowerSchool in 2015, with Onex joining as an investor a few years later. PowerSchool went public in New York in 2021.
“With Bain Capital’s support, PowerSchool will have access to additional resources and the flexibility to drive further growth and innovation,” said PowerSchool CEO Hardeep Gulati.
PowerSchool’s board has approved the deal, which is expected to finalize in the latter half of this year.
The deal’s debt financing is being provided by Ares Capital Management, HPS Investment Partners, Blackstone Alternative Credit Advisors, and Blue Owl Credit Advisors.
Advisors for PowerSchool on the transaction included Goldman Sachs & Co LLC, Kirkland & Ellis LLP, Centerview Partners LLC, and Freshfields Bruckhaus Deringer LLP.
PowerSchool’s shares remained stable following the announcement. As of the last close, its market capitalization stood at $4.56 billion, according to LSEG.
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