Renaissance Learning got acquired by private equity firm Hellman & Friedman on Monday for $1.1 billion in cash. The deal was announced today.
The acquisition comes less than a month after Google Capital invested $40 million in Renaissance Learning, valuing the company at $1 billion. Google Capital plans to stay on board as investor.
Renaissance Learning was founded by Judi and Terry Paul in 1984 who have also remained the majority shareholders in the company for the longest time. British private equity firm Permira acquired Renaissance Learning for $440 million in 2011, taking the company off the public markets, fourteen years after its IPO in 1997.
Though the investment by Google Capital and the acquisition seem to be orchestrated, Renaissance Learning’s CEO John J. Lynch Jr. told NYT Dealb%k that it was serendipitous. The company had been in talks with Hellman & Friedman before Google’s investment but was not sure when it would start working with them according to Fortune.
According to Lynch Renaissance Learning is currently working on a GPS for students, identifying where they are on their learning path and what they are ready to learn. The business has high margins according to Lynch and saw a revenue growth of 20% last year. Currently, about 20 million students are using the platform at a cost of $5 per student per year.
As Liz Gannes points out on re/code, this acquisition is not ideal for Google Capital as the return on their investment would be minimal. Therefore, it seems as if Google Capital will ramp up its minority stake in Renaissance Learning alongside Hellman & Friedman.
Lynch estimates that Hellman & Friedman will hold on to their investment for four to seven years after which a new IPO or another acquisition might happen.
The new money will be invested in international expansion and research and development of the analytics products.
- Renaissance Learning to Be Acquired for $1.1 Billion by Hellman & Friedman | MarketWired
- Just a Month After Google Capital Funding, Renaissance Learning Sells for $1.1B | re/code
- Two weeks after Google investment, Renaissance Learning is sold | Fortune
- Renaissance Learning Is Sold to Hellman & Friedman for $1.1 Billion | Dealb%k
- 30-Year-Old Ed Tech Company Lands $1.1 Billion Payday | Inc.
- HEDLINE: Google Capital invests $40 million in Renaissance Learning | EDUKWEST