Plato To Acquire Archipelago Learning
Thoma Bravo's Plato Learning will acquire Archipelago Learning for $11.10 per share, or approximately $291 million, following a unanimous decision by Archipelago's board of directors.
Archipelago Learning provides educational solutions such as Reading Eggs and Reading Eggspress, Study Island, EducationCity.com, ESL ReadingSmart, Reading Mate, and Northstar Learning via a software-as-a-service model.
Plato Learning also provides online educational products such as standards-based assessments and courses for K-12, post-secondary, and adult learners.
Together, the two companies reach approximately 17 million learners in more than 50,000 schools.
Archipelago's revenue for the fourth quarter of 2011 was $19.5 million, "an increase of $2.4 million, or 14.0 percent compared with the same period a year ago," according to information released by the company. Over the entire year, the company saw an increase of $14.6 million for a total revenue of $73.3 million, or 24.9 percent greater than 2010.
"The transaction represents a premium of 23 percent to the closing price of $9.04 on March 2, 2012, and a premium of 17 percent to the company’s weighted average trading price for the last twelve months," according to information released by the companies.
The transaction comes as the result of an "extended evaluation of strategic alternatives by Archipelago's board of directors," according to information released by the company. As part of that evaluation, a transaction committee with independent directors "held discussions with a number of parties, including PLATO Learning, through a formal, competitive process."
"This transaction is an excellent outcome for each of our constituents: the millions of students who use our products on a daily basis; the thousands of teachers who leverage our products to improve student performance and learning outcomes; and our shareholders, for whom this represents an attractive premium," said Tim McEwen, Archipelago CEO and president. "PLATO Learning is an excellent partner for Archipelago Learning, with a strong presence in online core curriculum that is highly complementary to our online supplemental curriculum. With our combined financial strength and additional support from Thoma Bravo, we have the means to support our continued innovation and expansion to more comprehensively meet the needs of our customers."
"Archipelago Learning is a true innovator in online, supplemental instruction," said Vin Riera, CEO at Plato. "This acquisition allows us to cover the entire spectrum of learning needs from pre-K through postsecondary, as well as reach a broader group of students and educators with a product portfolio that sets a rigorous standard in online education."
In related news, the Kendall Law Group is investigating Archipelago to determine if the company and its board "breached their fiduciary duties by entering into the agreement without properly shopping for a deal that would provide better value for shareholders," according to a statement released today by Kendall.
"According to Thompson/First Call, at least one analyst has set a price target of $12.00 per share for Archipelago Learning’s stock," according to Kendall's statement. "The firm’s investigation seeks to determine whether Archipelago Learning and its Board undertook a fair process in negotiating the deal."
Visit archlearning.com for more information about Archipelago Learning. More information about Plato Learning is available at plato.com.
About the Author
Joshua Bolkan is contributing editor for Campus Technology, THE Journal and STEAM Universe. He can be reached at [email protected].