Bain Capital Explores $6 Billion Deal for PowerSchool

Private equity firm Bain Capital is reportedly in discussions to purchase education-software provider PowerSchool. 

The proposed $6 billion deal — still weeks away from being finalized — was reported Wednesday (May 7) by Reuters, citing a source familiar with the matter. 

Based in Folsom, California, PowerSchool makes cloud-based software for K-12 education. Its unofficial roots, the report said, came when teenager Greg Porter developed record-keeping software at his high school in 1983, with the school paying Porter $350 for the program.

Today, PowerSchool has a market capitalization of more than $4 billion.

The Reuters report noted that Bain’s bid to take PowerSchool private would arrive at a moment when private equity-led buyouts appear to be undergoing a resurgence, after a fallow period in 2023 when high interest rates drove up the price of debt financing for leveraged buyouts.

For example, this week brought the news that private equity firms have been considering a buyout of Peloton.

A report by CNBC — citing unnamed sources — said at least one firm has talked with Peloton about going private, while others have considered an acquisition but may or may not have talked with the company.

Meanwhile, last week saw a report that private equity companies have begun stepping up efforts to compete with banks on low-interest loans.

For example, Apollo Global has increased its long-term forecasts for its lending business, telling investors it anticipates that it will be able to originate more than $200 billion a year in new loans, compared to $150 billion under its old forecasts.

Apollo Co-president Jim Zelter said economic activity in the U.S., driven by increased public and private spending on infrastructure projects, was leading to greater demand for loans.

“When you think about what’s going on domestically … what’s going on in electric vehicles, there are many, many investment grade companies that are going to be confronted with massive growth initiatives,” Zelter said. “It’s not obvious that they should do it through the traditional channels of investment grade public debt or equity.”

A report by the Financial Times last week said the largest buyout firms on the planet have made low-risk lending an essential part of their growth plans. Investment grade loans have become especially attractive, mainly for companies that have acquired large insurers, driving a continued demand for high-earning investment assets.