Private equity firm buys Instructure for $ 2 billion and privatizes it

Mikel Amigot | new York

Instructure (NYSE: INST), the company behind Canvas LMS, announced yesterday that it has agreed to be acquired by private equity firm Thoma Bravo, LCC, in a cash deal for approx $ 2 billion –Unless a better deal comes up within 35 days.

The transaction is expected to close in the first quarter of 2020. Upon completion of the acquisition, Instructure will become fully owned by Thomas bravo.

As part of the agreement, shareholders will receive $ 47.60 in cash per share, which is about a 10% discount from Instructure’s closing price of $ 52.96 on Tuesday. The company’s shares had fallen about 10% to $ 47.85 in pre-market trading.

The price per share represents an 18% premium over the 3-month volume-weighted average price of the company as of October 27, 2019–the day before the company’s third quarter earnings call, in which it announced a strategic review of its Bridge business.

While pushing for a sale, based in New York Sachem Head of Capital Management and other activist companies, have purchased shares of Instructure over time. The exact size of their position could not be determined.

Instructure’s management team, led by CEO Dan Goldsmith, will continue to lead the company in their current functions, and the head office of the company will remain in Salt Lake City, Utah.

“Instructure believes the opportunity to become a private company will provide additional flexibility and position us to invest more strategically to drive innovation for our clients.” Goldsmith said. “We have chosen this path very deliberately; we are convinced that the transition from public to private will best serve the needs of Instructure and all of you in the future ”, he announced in a letter to clients.

Brian jaffee, a director of Thoma Bravo said: “We believe Canvas is a very unique vertical market SaaS leader with exciting scale and potential for future growth. We look forward to building on the strong business momentum and accelerating growth and product investments both organically and through mergers and acquisitions. “

The agreement includes a 35-day go-shop period expiring on January 8, 2020, which allows the Board of Directors and Advisors of Instructure to consider other acquisition proposals.

JP Morgan Securities LLC is the exclusive financial advisor to Instructure and Cooley LLP is the legal advisor. Kirkland & Ellis is the legal advisor to Thoma Bravo.

At least four companies – Halper Sadeh LLP, Rowley Law PLLC, Bragar Eagel & Squire, PC and Rigrodsky & Long, PA – separately announced yesterday that they were investigating potential legal claims against Instructure’s board of directors, regarding possible breaches of fiduciary duty, among other violations of the law related to the sale of the business.

• Latest news on Instructure at IBL News

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