By Milana Vinn
(Reuters) – Private equity firms KKR and Francisco Partners are competing to acquire Instructure, a U.S. education software provider with a market value of $3.4 billion, people familiar with the matter said on Wednesday.
The two buyout companies have advanced to the final round of bidding for Instructure and are preparing to submit binding offers next week, the sources said.
There is no certainty that private equity firm Thoma Bravo, which has an 83% stake in Instructure, will agree to its sale, and other bidders could emerge, said the sources, who requested anonymity because the matter is confidential.
Instructure, KKR, Francisco Partners and Thoma Bravo declined to comment.
Based in Salt Lake City, Instructure provides software to schools, colleges and universities. It has more than 8,000 customers in more than 100 countries.
The company’s flagship learning management system is called Canvas and competes with programs like Google (NASDAQ:) Classroom, Blackboard Learn and Schoology.
Thoma Bravo took Instructure private in 2020 for $2 billion, before bringing it back to the stock market through an initial public offering a year later.
Instructure’s shares are hovering just above their IPO price of $20 three years later, as the boom the company enjoyed from spending on remote learning during the COVID-19 pandemic faded as competition from rivals intensified.
Earlier this year, Instructure completed its acquisition of Parchment, an academic credential management platform, for $835 million. Reuters reported in May that Thoma Bravo had put Instructure up for sale.
PowerSchool Holdings, another educational software provider, agreed last month to be acquired by private equity firm Bain Capital for $5.6 billion.
The deal price was equal to seven times PowerSchool’s expected 12-month revenue, within a range of seven to 11 times that of recent industry deals, Jefferies analysts said. According to LSEG data, Instructure currently trades at six times forward 12-month revenue.
