Vista, Onex-Backed Software Firm PowerSchool Plans IPO

PowerSchool has filed confidentially for a U.S. initial public offering that could value the education software provider at more than $6 billion, including debt, according to people with knowledge of the matter.

The company, backed by private equity firms Vista Equity Partners and Onex Corp., could IPO later this year, said the people, who asked to not be identified because the matter isn’t public. Folsom, California-based PowerSchool has engaged Goldman Sachs Group Inc. to lead the share sale, one of the people said.

Representatives for PowerSchool and Onex couldn’t be reached for comment. Representatives for Vista Equity and Goldman Sachs declined to comment.

Vista Equity agreed to acquire PowerSchool for $350 million in 2015 from Pearson Plc, after the education giant announced a carve-out plan earlier that year, a statement showed.

The company provides applications that power classrooms serving 45 million students in over 80 countries, according to its website.

Higher Valuation

A potential $6 billion-plus valuation would be twice the $3 billion it was worth in 2018 when Onex acquired a stake, the people said.

The company, based outside of Sacramento, has been acquisitive. Vista in 2018 merged PowerSchool with another portfolio company called PeopleAdmin. Onex acquired a stake in concurrent transaction where it became equal partners with Vista, according to a statement.

PowerSchool also acquired online learning startup Schoology in 2019 and bought a unit of Sungard in 2017, statements showed.

Education technology companies have benefited during the coronavirus pandemic, as many countries mandated remote learning to curb the spread of the virus. That’s resulted in more dealmaking in the sector.

Online education platform Nerdy Inc., which owns Varsity Tutors, agreed last month to go public with a special purpose acquisition company backed by private equity firm TPG. The deal values the merged companies at about $1.7 billion.

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