Another global private equity firm, Warburg Pincus LLC, is reportedly in talks to take Folsom-based PowerSchool Holdings Inc. private.
Bloomberg reported Monday that New York-based Warburg Pincus is in talks with PowerSchool, adding to the speculation that Bain Capital LP is also in talks to take the provider of education software private, which The Wall Street Journal reported May 8.
In both cases, the reports cited “sources close to the matter” without naming them.
Bloomberg reported that PowerSchool (NYSE: PWSC) is engaging with buyout firms and has “formed a special committee of its board of directors, which is working with an investment bank,” citing sources who asked not to be identified.
PowerSchool, Warburg Pincus and Bain representatives declined to comment on the published reports.
Warburg Pincus is based in New York City. Bain Capital is based in Boston.
Sources said no final decision has been made about how to proceed, and that PowerSchool could remain independent, Bloomberg reported. It also said that if a deal is made, it could be announced in weeks.
PowerSchool is the largest locally based public company.
PowerSchool has been owned by a succession of different companies over the years, including Apple Inc. (Nasdaq: AAPL) and London-based educational publisher Pearson PLC. In 2016, Pearson (NYSE: PSO) sold PowerSchool to private equity firm Vista Equity Partners.
In 2018, Canadian private-equity firm Onex Corp. invested alongside Vista, and they took the company public in 2021. The private equity firms still own stakes in PowerSchool. Onex and Vista own about 63% of PowerSchool’s outstanding shares, according to data compiled by Bloomberg.
PowerSchool launched in Folsom in 1997, offering online tracking of grades and attendance. Over the years it's added more functionality and modules to support school administrators, teachers, parents and students on a cloud-based platform supporting 50 million students globally.
While it’s been in business for 27 years, PowerSchool has been publicly traded for only three years, going public in an initial public offering in the summer of 2021.
PowerSchool has recently been the target of New York-based short-seller investor Spruce Point Capital Management LLC, which published a critical report about PowerSchool in April. Spruce Point's report forecast that PowerSchool shares could fall 30% to 60% from their then-closing price of $19.73. Shares of PowerSchool dropped nearly 10% in April following the release of the report by Spruce Point.
PowerSchool shares closed at $20.62 Monday, up 4.6%.
