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Archipelago Learning To Be Taken Private By Plato Learning In $291 Mln Deal

3/5/2012 9:47 AM ET

Archipelago Learning, Inc. (ARCL: Quote) agreed Monday to be taken private by Online education solutions provider Plato Learning, which is owned by private equity firm Thoma Bravo, LLC., for $11.10 per share in cash, representing an equity value of around $291 million.

The deal, which is expected to close in the second quarter, has the unanimously approval of Archipelago's directors, who have also recommended that stockholders approve the deal.

"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's Chairman, President and CEO Tim McEwen said in a statement.

Archipelago Learning is a software-as-a-service provider of supplemental education products. Founded in 2000, its products provide standard-based instruction, practice, assessment and productivity tools for educators and students in the U.S., Canada and the U.K.

The offer price of $11.10 per share represents a premium of 23 percent to Archipelago's closing price of $9.04 on Friday. Shares of Archipelago are currently soaring 21.68 percent in regular trading to match the offer price.

"This acquisition allows us to cover the entire spectrum of learning needs from pre-k through post secondary; as well as reach a broader group of students and educators with a product portfolio that sets a rigorous standard in online education," Plato's CEO Vin Riera noted.

Plato Learning was acquired in March 2010 by an affiliate of Thoma Bravo in a deal valued at about $143 million. The company is a provider of computer-based and e-learning instruction for kindergarten through adult learners.

The proposed deal will enhances Plato's portfolio of education solutions and enable it to offer a complete set of products and services to its customer base. Following the closure of the deal, the combined companies' customer base will include over 50,000 schools and 17 million pre-K through adult students. Archipelago's online core curriculum will be highly complementary to Plato's online supplemental curriculum.

Meanwhile, Providence Equity Partners and select additional shareholders together have agreed to vote the shares they control representing about 49 percent of Archipelago Learning's outstanding shares, in favor of the deal with Plato Learning.

The move to acquire Archipelago comes after Plato learning had unsuccessfully tried to acquire educational software and hardware company Renaissance Learning, Inc. (RLRN: Quote) in October 2011, despite sweetening its offer twice. All their approaches were rejected by Renaissance, which was finally acquired by affiliates of the Permira Funds in October itself.

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by RTT Staff Writer

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