Bain Capital acquires PowerSchool in $5.6 Billion EdTech shakeup

PowerSchool, a prominent provider of cloud-based software for K-12 education, announced its agreement to be acquired by Bain Capital, a global investment firm. The deal values PowerSchool at $5.6 billion, marking a significant move in the educational technology sector.

Under the terms of the agreement, PowerSchool shareholders will receive $22.80 per share in cash, reflecting a 37% premium over the company’s share price of $16.64 on 7th May, the last trading day before reports of a potential transaction emerged.

The PowerSchool Board of Directors, guided by a Special Committee of independent directors, approved the merger agreement. Shareholders holding a majority of the voting securities have also given their consent. The transaction, expected to close in the second half of 2024, is subject to customary closing conditions and regulatory approvals.

Once the deal is finalised, PowerSchool’s common stock will be delisted from the New York Stock Exchange, transitioning the company to private ownership.

Hardeep Gulati, CEO of PowerSchool, emphasised the benefits of the acquisition: 

“PowerSchool is a leader in K-12 SaaS technology in North America and is uniquely positioned to provide differentiated, mission-critical solutions that drive better education outcomes, empower educators, and help district operations run more efficiently.

 “With Bain Capital’s support, PowerSchool will have access to additional resources and the flexibility to deliver even more growth and innovation, particularly with PowerBuddy, our generative AI platform, and scale our global reach in helping schools personalise education for every student journey.”

PowerSchool, which serves over 55 million students and over 17,000 customers in over 90 countries, will continue its operations without interruption. The company remains committed to supporting K-12 education through advanced technology.

“PowerSchool’s innovative software solutions in and out of the classroom provide a strong foundation for K-12 academic success. Their products are highly respected by administrators, educators, students, and parents because they foster active collaboration and offer actionable insights needed to support positive learning outcomes.”

Max de Groen, another Partner at Bain Capital, added:

 “As demand for K-12 educational technology grows, we believe there are significant opportunities to expand access to PowerSchool’s best-in-class product suite around the world. We look forward to working with PowerSchool to accelerate the Company’s growth while strengthening its commitment to help educators and students realise their full potential.

Vista Equity Partners and Onex Partners will maintain minority stakes in PowerSchool. Monti Saroya, Co-Chairman of PowerSchool’s Board of Directors, highlighted their continued commitment: 

“Vista’s continued investment in PowerSchool reflects our conviction that software will remain a fundamental component of a future educational ecosystem being dramatically reshaped by digital transformation. 

“From helping to meet the unprecedented challenges of remote learning to being a leader in developing responsible, personalised approaches to AI-assisted learning tools, we are proud of the innovation and growth achieved during our partnership with PowerSchool.”

Laurence Goldberg, Co-Chairman of PowerSchool’s Board of Directors, and Managing Director of Onex Partners echoed this sentiment:

“Since the beginning of our partnership, we have been proud to support Hardeep and PowerSchool on the mission to drive digital transformation in K-12 education, enhancing the experience and outcomes for students, educators, administrators and parents. 

“We are committed to and excited about fueling the next phase of PowerSchool’s technology leadership and global impact.”