PowerSchool Goes Private: Bain Capital's $5.6 Billion Bet

Bain Capital is set to take PowerSchool Holdings (PWSC) private in a $5.6 billion deal, as announced on Friday. Bain Capital will pay $22.80 per share in cash to PowerSchool shareholders, a 37% premium over the company’s closing price on May 7. Existing investors Vista Equity and Onex will retain minority stakes in the company following the transaction. This buyout highlights a resurgence in private equity-led deals, which had slowed due to high interest rates impacting debt financing for leveraged buyouts. PowerSchool, headquartered in Folsom, California, provides cloud-based software for K-12 education and serves over 17,000 customers in more than 90 countries. The company was acquired by Vista Equity in 2015, with Onex investing a few years later. PowerSchool went public in 2021. CEO Hardeep Gulati emphasized that Bain Capital's support would provide the resources and flexibility needed to drive further growth and innovation. The deal, approved by PowerSchool's board, is expected to close in the latter half of this year. Market Overview:

• Bain Capital to take PowerSchool Holdings private in a $5.6 billion deal.
• The offer price of $22.80 per share represents a 37% premium over May 7's closing price.
• Existing investors Vista Equity and Onex will retain minority stakes post-transaction.

Key Points:

• PowerSchool provides cloud-based software for K-12 education, serving over 17,000 customers globally.
• The buyout signals a resurgence in private equity-led deals following a slowdown due to high interest rates.
• The deal is expected to close in the latter half of this year.

Looking Ahead:

• Bain Capital's support is expected to drive further growth and innovation for PowerSchool.
• The transaction reflects increasing activity in the private equity market.
• Key advisors in the deal include Goldman Sachs (GS), Kirkland & Ellis, Centerview Partners, and Freshfields Bruckhaus Deringer.

The resurgence in private equity-led deals is underscored by this significant transaction, which follows a recent $2.1 billion acquisition by a PE consortium led by Clearlake Capital and Francisco Partners. This indicates a potential shift in market dynamics as private equity firms find opportunities despite the challenges posed by high interest rates. PowerSchool's strategic positioning in the education technology sector makes it a valuable asset for Bain Capital, providing a solid foundation for future growth. Debt financing for the deal will be provided by Ares Capital Management, HPS Investment Partners, Blackstone Alternative Credit Advisors (BX), and Blue Owl Credit Advisors. The acquisition is expected to close in the latter half of this year, with PowerSchool poised to benefit from Bain Capital's resources and strategic guidance. This move not only highlights the resilience of the private equity market but also underscores the ongoing evolution of the education technology sector.