Bain Capital Acquires PowerSchool for $5.6 Billion

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Bain Capital has announced plans to take PowerSchool Holdings (PWSC.N) private in a deal that values the education software provider at $5.6 billion, as confirmed by PowerSchool on Friday. According to the terms of the deal, Bain Capital will pay PowerSchool shareholders $22.80 per share in cash. Despite this change in ownership, existing investors Vista Equity and Onex will retain a minority interest in the company once the deal is finalized.

The offer price of $22.80 per share represents a 37% premium over PowerSchool’s closing price on May 7, the day before Reuters reported ongoing discussions between PowerSchool and Bain Capital regarding a potential deal. This buyout occurs amidst a resurgence in private equity-led transactions, which had previously slowed down due to high interest rates that increased the cost of debt financing for leveraged buyouts.

Recent private equity activity includes a consortium led by Clearlake Capital and Francisco Partners, which agreed last month to acquire the software integrity unit of chip designer Synopsys (SNPS.O) for $2.1 billion. Such movements signal a recovering market for private equity deals.

PowerSchool, headquartered in Folsom, California, provides cloud-based software solutions for K-12 education across North America, serving over 17,000 customers in more than 90 countries. Vista Equity first acquired PowerSchool in 2015, and Onex made a subsequent investment in the company a few years later. PowerSchool went public in 2021, listing its shares on the New York Stock Exchange.

PowerSchool’s CEO, Hardeep Gulati, expressed optimism about the buyout, stating, “With Bain Capital’s support, PowerSchool will have access to additional resources and the flexibility to deliver even more growth and innovation.” The company’s board has approved the transaction, which is expected to be finalized in the latter half of this year.

The financing for the deal will be provided by several debt financiers, including Ares Capital Management, HPS Investment Partners, Blackstone Alternative Credit Advisors, and Blue Owl Credit Advisors. PowerSchool received advisory services for the transaction from Goldman Sachs & Co LLC, Kirkland & Ellis LLP, Centerview Partners LLC, and Freshfields Bruckhaus Deringer LLP.

Following the announcement of the buyout, PowerSchool’s share price remained unchanged. As of its last close, PowerSchool’s market capitalization stood at $4.56 billion, according to data from LSEG.