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Renaissance Learning Agrees To Go Private In $440 Mln Cash Deal - Update

Educational software and hardware company Renaissance Learning, Inc. (RLRN) on Tuesday said it has agreed to be acquired by European private equity firm Permira Funds for $14.85 per share in cash, or approximately $440 million. The transaction represents a premium of 26 percent over Renaissance's closing stock price on Monday. Renaissance shares are currently trading around 24 percent higher on the Nasdaq Stock Exchange.

The company's Board of Directors has approved the merger deal, and is recommending that shareholders adopt the agreement.

Renaissance's co-founders Terrance and Judith Paul, together with affiliates and members of their family, holding a total of 69 percent stake in the company, have agreed to vote in favor of the deal, the company said.

The sale is expected to close in the fourth quarter, subject to customary closing conditions, including approval by Renaissance's shareholders and clearance under the Hart-Scott-Rodino Act.

Following the deal closure, Renaissance will become a privately held company and its stock will cease to trade on the Nasdaq National Market.

Renaissance provides technology-based school improvement and student assessment programs for K12 schools. The company's tools have been adopted by approximately 70,000 schools, to provide daily formative assessment and periodic progress-monitoring technology. It has seven U.S. locations and subsidiaries in Canada and the United Kingdom.

Terrance Paul, chairman of Renaissance, said, "This transaction enables Renaissance Learning to expand its impact in education in the U.S. and abroad, and represents a very positive outcome for our employees, shareholders and the schools we serve."

Further, Brian Ruder, Permira Partner and Head of the Menlo Park office, said, "Renaissance Learning has all of the characteristics the Permira funds seek in a growth investment - leading products, a top-tier customer base, and a world-class management team."

In the transaction, Goldman Sachs & Co. acted as exclusive financial advisor to Renaissance and Godfrey & Kahn, S.C. acted as legal advisors.

Morgan Stanley & Co., LLC acted as lead financial advisor to the Permira Funds and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor.

Meanwhile, Tripp Levy PLLC, a national securities law firm, announced an investigation into the proposed acquisition of Renaissance by the Permira Funds. The investigation mainly concerns whether the consideration to be paid to shareholders is unfair, inadequate, and substantially below the fair or inherent value of the company.

Tripp Levy noted that analysts have projected that the true inherent value of the company is about $16 per share.

RLRN is currently trading at $14.67 in pre-market activity, up $2.84 or 24.01 percent.

by RTT Staff Writer

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