Education software company PowerSchool Holdings Inc. has reached an agreement to acquire Kinvolved Inc., a company that supports schools’ efforts to get students to attend classes using a variety of communications technologies.
PowerSchool (NYSE: PWSC) already helps school districts track attendance, but adding Kinvolved technology could help school districts respond quickly to absenteeism, said PowerSchool CEO Hardeep Gulati.
“It is one of our top requests from our customers,” Gulati told the Business Journal.
The value of the cash deal will not be released until PowerSchool reports earnings, Gulati said, adding that it is a smaller deal.
Kinvolved is a New York-based startup founded in 2012 that is focused on improving attendance and reducing chronic absenteeism in schools.
Absenteeism is a problem for students because it puts them behind in their learning, and it is a financial problem for schools, because they lose funding for every absent student.
Schools lose more than $10 billion annually due to absenteeism, Gulati said.
Kinvolved aids in collaborative communication with teachers, parents and students, he said. In addition to being able to send out mass notifications, Kinvolved also sends specific communications — via text, email or phone — about absenteeism. It has two-way communications to get responses from parents and students. Its informational alerts can be translated into 80 languages.
Kinvolved is PowerSchool’s 14th acquisition in five years. The deal is expected to close this quarter, and it will be funded by cash on hand, Gulati said.
This is PowerSchool’s second acquisition since it went public in an initial public offering in June that netted the Folsom-based company $766 million. Its last acquisition was education behavioral health company Kickboard Inc., announced in November.
Kinvolved supports nearly 700,000 stakeholders from small rural to urban communities across 16 states. The company's technology is used by three of the top four school districts in the country. Kinvolved has been a PowerSchool partner for more than two years with some of PowerSchool's offerings. Kinvolved said it it can, on average, reduce absenteeism by 8%.
The merger will also bring new customers into the PowerSchool fold, Gulati said. It will allow for deeper integration of more of PowerSchool's other products, which include software used to support school administrators with a variety of programs that eliminate manual processes for everything from daily attendance to counseling to grades. PowerSchool also provides an online platform for virtual learning, and offers supports to teachers, parents and students with online lesson plans. PowerSchool offers analytics and assessment products, as well as career counseling and college search.
Both companies offer services for in-person and remote learning. In remote-learning environments, the software from both companies can detect attendance by engagement and achievement.
All the staff of Kinvolved are expected to join PowerSchool, which has more than 3,000 employees. Gulati said Kinvolved is a small team, but it is a very talented team with robust technology.
PowerSchool supports over 45 million students globally and more than 13,000 customers, including more than 90 of the top 100 districts by student enrollment in the U.S., and it sells its products in more than 90 countries.
PowerSchool stock took a hit in December when Goldman Sachs lowered its long-term price target on PowerSchool shares to $17, based on the difficulty of school funding. PowerSchool shares fell 15.5% that day to close at $17. They've since continued to fall, trading as low as $12.35 in recent weeks.
Gulati said the current share price is a result of short-term market volatility. He said education is a safe haven in choppy markets, and it tends to be resilient even to interest rate changes. He added that some analysts don't fully understand that PowerSchool is a software-as-a-service company, and not a content company in the education space.
