Wheelings & Dealings: Renaissance Learning Being Sold Following Google Funding

By

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

SHARE THIS ARTICLE
Related Articles

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More

Oct. 17 Webinar to Address Apache Spark Benefits, Tools

By: Paula Bernier    10/2/2018

In the upcoming webinar "Apache Spark: The New Enterprise Backbone for ETL, Batch and Real-time Streaming," industry experts will offer details on clo…

Read More

It's Black and White: Cybercriminals Are Spending 10x More Than Enterprises to Control, Disrupt and Steal

By: Cynthia S. Artin    9/26/2018

In a stunning new report by Carbon Black, "Hacking, Escalating Attacks and The Role of Threat Hunting" the company revealed that 92% of UK companies s…

Read More

6 Challenges of 5G, and the 9 Pillars of Assurance Strategy

By: Special Guest    9/17/2018

To make 5G possible, everything will change. The 5G network will involve new antennas and chipsets, new architectures, new KPIs, new vendors, cloud di…

Read More