Charterhouse Capital Partners has highlighted private equity groups' increasing appetite for the education sector after agreeing to pay $2bn for SkillSoft, a US teaching software provider.
The London-based buyout house signed the deal after competing in an auction with other private equity bidders including US-based Providence Equity Partners, according to people with knowledge of the negotiations. It is buying the company, which is headquartered in Dublin but operates mainly from Nashua, New Hampshire, from a trio of leveraged buyout houses.
Berkshire, Advent and Bain Capital took SkillSoft private in 2010 in a $1.1bn transaction. The company offers e-learning programmes, digitised books and videos among other products. It will continue to be headquartered in Dublin and led by the existing management team.
The SkillSoft transaction is the latest in a series of investments led by private equity groups in the education sector in the past few years.
It follows news on Thursday that buyout fund manager Hellman & Friedman agreed to buy Renaissance Learning from Permira, another private equity group. The deal valued the company at $1.1bn, including debt. Google's venture capital arm had bought a minority stake in the Wisconsin-based education software maker less than a month ago in a transaction that valued it at $1bn.
Permira is separately evaluating the purchase of a stake in Gems Education, a Dubai-based company that operates private schools in the Middle East, some parts of Asia, the UK and the US, according to a person with knowledge of the talks. Gems Education, which is seeking funds to expand its network geographically, could be worth more than $1.5bn including debt, according to Education Investor, a trade publication. Permira declined to comment.
Private equity groups have been targeting private education companies that meet an increasing demand for more personalised learning tools helped by new technology, as well as the growing need for private teaching services. Permira's quadrupling its investment in Renaissance Learning in just two and half years has also whetted appetite.
Other recent private equity deals in the education sector have included the acquisition by buyout group TPG of UK-based TSL Education for about £400m including debt. TLS has built a digital platform allowing 52m teachers and students to share and download course materials and lessons.
In 2011, Providence purchased educational software provider Blackboard for $1.6bn.
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