Private equity firms that own a large majority stake in PowerSchool Holdings Inc. have proposed a secondary offering of PowerSchool stock they own, currently worth about $200 million.
Folsom-based PowerSchool (NYSE: PWSC) is an education cloud software company that serves 50 million students in 90 countries.
Private equity firms Onex Partners Manager LP and Vista Equity Partners have for years led investments into PowerSchool, fueling a succession of mergers and acquisitions. When PowerSchool had its initial public offering in 2021, the private equity firms retained large positions in the company.
In filings with the Securities and Exchange Commission last year, PowerSchool reported that Onex and Vista Equity Partners each owned about 38% of the company's outstanding shares, which combined neared 77% ownership. The largest owner of Class A common stock at that time was Vista with 75.4 million shares.
In a filing with the SEC on Tuesday, PowerSchool reported that the two private equity companies combined are offering 8.7 million shares to the public.
With the sale of 8.7 million shares, the private equity firms would reap $199.7 million between them at the Tuesday closing price of $22.95 per share. Their ownership would decline by less than 6%.
PowerSchool will not receive proceeds from the sale.
Investment banks Goldman Sachs & Co. LLC and Barclays Capital Inc. are acting as joint book-running managers and representatives of the underwriters for the proposed offering. The selling stockholders intend to grant the underwriters an option to buy up to an additional 1.3 million shares.
PowerSchool's initial public offering of stock in 2021 raised the company $766.1 million, net of underwriting costs and commissions. Last month, the company reported that it's expanding into sub-Saharan Africa, after it grew revenue by double digits and shrank its loss in the most recent quarter.
