St. Louis-based Nerdy, the parent company of edtech firm Varsity Tutors, is a step closer to becoming a publicly traded company.
TPG Pace Tech Opportunities, the special purpose acquisition company (SPAC) with which Nerdy will merge, has scheduled a shareholder meeting for Sept. 14 to vote on approval of the deal. TPG Pace Tech Opportunities said last week it had its registration statement for the proposed business combination deemed effective by the U.S. Securities and Exchange Commission.
After the deal, Nerdy will be listed on the New York Stock Exchange with the ticker “NRDY." TPG Pace Tech Opportunities said it expects the business combination to close shortly after the Sept. 14 shareholder meeting.
Founded in 2007, Varsity Tutors debuted as a tool to connect people with in-home tutoring and test prep. It has since become what it describes as a "live learning company," offering an array of online tools for everything from immersive online instruction to self-study. Nerdy founder, Chairman and CEO Chuck Cohn launched the company in 2007 as a student at Washington University after having difficulty finding a tutor for one of his courses.
Nerdy and TPG Pace Tech Opportunities in January announced their proposed deal, which values Varsity Tutors’ parent company with a $1.7 billion market capitalization. The SPAC behind the deal is the product of TPG, a private equity giant that has previously backed disruptive tech and gig economy companies firms such as Uber and Airbnb. SPACs are created with the intent of raising capital through an initial public offering, then using the proceeds to acquire a private company and take it public. They're often referred to as "blank check companies" because investors fund them often without before the acquisition target is known.
The deal between Nerdy and TPG Pace Tech Opportunities was initially expected to close in the second quarter of this year.
“The main reason for the delay relative to our prior expectations is the sheer volume of work the SEC is working through. That’s resulting in delays for all companies looking to go public,” Nerdy Chief Financial Officer Jason Pello said earlier this month on an earnings call.
Nerdy reported revenue of $32.8 million for the quarter ended June 30. It said that figure was up 52% year over year and more than $4.5 million beyond its projection. The company reported a net loss of $300,000 for the quarter, down from $4.1 million in the year ago period.
