Wheelings & Dealings: Renaissance Learning Being Sold Following Google Funding

By Steve Anderson March 13, 2014

It was only a few weeks ago, back in mid-February, when Google valued a new company known as Renaissance Learning at $1 billion, and subsequently invested $40 million in the company's operations. That's a valuation that proved almost eerily accurate as a second company, Hellman & Friedman, put a valuation of $1.1 billion on the company, and then promptly paid up, buying the company.

Renaissance Learning's previous owner, a private equity firm called Permira, reportedly took the 30 year old company off public markets in a purchase for $455 million back in 2011. The new deal sent the company to Hellman & Friedman for the aforementioned sum. Google Capital, meanwhile, is expected to step in once more for a minority stake with the new owner in much the same way it recently did with the old. Details on that arrangement, meanwhile, have yet to be announced.

As Renaissance Learning CEO Jack Lynch explained, this was a big deal for Permira, who had what amounted to an opportunity to see huge returns without having to sacrifice a firm in which it had a long-term stake, so the company really couldn't pass it up. Hellman & Friedman, meanwhile, were likely attracted by Renaissance Learning's profitability, given that the company saw a 20 percent gain in revenue just last year in what Lynch described as “a very high margin business.”

But that wasn't all that likely drew Hellman & Friedman. There's also the issue of significant reach, as Renaissance Learning not only offers services to one in three United States schools, but also offers service in 57 different countries beyond. A reported 20 million students are involved with Renaissance Learning materials, and that's at $5 per student per year, so the revenue is just as substantial.

Google, however, was involved with the company even before Hellman & Friedman. Reports suggested that there are distribution deals afoot for Renaissance Learning matter to go on Google Play, and the company is set to put fully 50 percent more into the R&D budget than was seen last year.

Education is a hot-button topic for a lot of people, and has been for some time. Many, dismayed by what is perceived as an attack on values by public schools, are turning to homeschooling and private school options instead. Products like those offered by Renaissance Learning can be a big help in such endeavors, and that gives a wide market to tap as the newly-minted teachers go forth to find materials. Even public schools can get involved, as more and more are discovering the value inherent in buying an iPad for each student and pre-loading the textbooks onto said devices, instead of buying pallets of textbooks and then either having to re-buy the books or face the humiliation of having old textbooks in classes. Granted, in some cases, this is less a problem than others, but explaining the use of books two or three decades old can be difficult even in the best of times. Issues of backpack weight come into play as well, long thought a problem for still growing bodies, and the ability to shrink a load of schoolwork onto a tablet has to be tempting.

Education is a growth industry—as long as there are kids, there will be schools—and Renaissance Learning may have tapped a pocket of real value. At least, that's likely what Google thought...and what Hellman & Friedman thought as well.

Edited by Cassandra Tucker

Contributing TechZone360 Writer

Related Articles

Why Blockchain Could Be a Gamechanger

By: Paula Bernier    1/22/2018

Blockchain has become closely associated with the controversial topic of cryptocurrency. And that's fine because blockchain is an enabling technology …

Read More

Consumer Privacy in the Digital Era: Three Trends to Watch

By: Special Guest    1/18/2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on …

Read More

CES 2018: Terabit Fiber - Closer Than We Think

By: Doug Mohney    1/17/2018

One of the biggest challenges for 5G and last mile 10 Gig deployments is not raw data speeds, but middle mile and core networks. The wireless industry…

Read More

10 Benefits of Drone-Based Asset Inspections

By: Frank Segarra    1/15/2018

Although a new and emerging technology, (which is still evolving), in early 2018, most companies are not aware of the possible benefits they can achie…

Read More

VR Could Change Entertainment Forever

By: Special Guest    1/11/2018

VR could change everything from how we play video games to how we interact with our friends and family. VR has the power to change how we consume all …

Read More