Vista Equity Partners explores options for PowerSchool, PeopleAdmin: sources

Private equity firm Vista Equity Partners Management LLC (Vista) is exploring options for two software companies it owns, PowerSchool and PeopleAdmin, that could involve combining them in a deal worth between US$2 billion to US$3 billion, according to people familiar with the matter.

Any deal would come as schools use more digital tools to enhance learning and reduce operational costs. Private equity firms have been taking advantage of the high valuations in the educational technology sector to cash out on their holdings.

Vista is working with investment bank UBS Group AG to evaluate its options for the two companies, the sources said, asking not to be named because the matter is confidential.

Vista is exploring a full range of options for the companies which could involve selling a minority or majority stake, a recapitalization, merging the two companies, an initial public offering or using the companies as a vehicle to buy another target, according to the sources.

Vista would like to keep a significant stake in the companies in whatever transaction it chooses, and no deal is imminent, the sources added.

UBS and Vista declined to comment. PowerSchool and PeopleAdmin did not respond to requests for comment.

PowerSchool, based in Folsom, California, provides education technology to schools and is projected to generate US$280 million in revenue this year, according to one of the sources familiar with the companies.

Vista bought PowerSchool for US$350 million in 2015 from Pearson Plc and has spent more than US$1 billion on subsequent acquisitions that it combined with the company including SunGard’s public sector and education business which closed last year. It struck an agreement with Microsoft Corp earlier this week to combine their products in K-12 schools.

PeopleAdmin, a talent management software firm based in Austin, Texas, was acquired by Vista in 2014 for an undisclosed sum.

Vista has previously combined educational assets only to sell them on to another company. In 2014, it sold Relias Learning, a combination of two companies, to Europe’s largest media group, Bertelsmann SE & Co. It completed a US$1.55 billion deal to buy Advisory Board’s education business last year.

About Vista Equity Partners: Vista Equity Partners (Vista) founded by Robert F. Smith, is an American private equity and venture capital firm established in 2000 focusing on financing and forwarding software and technology-enabled startup businesses, as well as passive equity investments.
The firm eschewed traditional investment strategies of spreading risk across sectors and decided instead to focus exclusively on enterprise software, data, and technology solutions. Under Smith’s leadership, Vista has grown to become a leading investment firm with over US$30 billion in cumulative capital commitments.
Together with its operational arm, Vista Consulting Group (VCG), Vista has over 280 employees, of which over 185 are considered investment and operating professionals who manage a series of private equity funds, credit funds, and a public equity market fund. In each case, these funds are generally focused on leveraging the firm’s substantial knowledge, experience, and intellectual capital in the enterprise software, data, and technology sectors.

Source: Reuters