Bloomberg News

Providence Equity Is Said to Be in Lead to Buy Blackboard

June 15, 2011

(Updates share price in second-to-last paragraph.)

June 15 (Bloomberg) -- Providence Equity Partners Inc. is in the lead to buy Blackboard Inc., a maker of online educational courseware, a person with knowledge of the situation said. The shares surged as much as 5.5 percent.

Blackboard has also been considering a bid from Hellman & Friedman LLC, said the person, who declined to be identified because the matter is private. The company has a market value of almost $1.5 billion.

Blackboard said in April it’s working with Barclays Capital to review unsolicited buyout offers. Founded in 1997, Blackboard makes software that lets teachers post course materials, conduct discussions and make assignments online. The company may lure bids from private equity firms as high as $55 a share, analysts at Stifel Nicolaus said in a report earlier this year.

The discussions could unravel and may not result in an agreement, according to the person familiar with the matter.

“Our board is committed to fulfilling its fiduciary duties to act in the best interests of shareholders,” Blackboard Chief Executive Officer Michael Chasen said in a statement announcing the unsolicited offers in April. “We remain focused on our company’s strategic plan and are committed to delivering the highest quality products and sustained client satisfaction.”

Providence last year acquired educational services provider Study Group Pty Ltd. The private equity company also joined with Goldman Sachs Capital Partners and Leeds Equity Partners to acquire for-profit college operator Education Management Corp., which sold shares to the public in 2009.

Blackboard shares jumped as high as $44.40 today, before closing at $42.17, up 9 cents, on the Nasdaq Stock Market. The stock has climbed 2.1 percent this year.

Michael Stanton, spokesman for Washington-based Blackboard, declined to comment on talks with potential acquirers. A spokesman for Providence declined to comment. Hellman & Friedman didn’t immediately return calls seeking comment.

--Editors: Lisa Rapaport, Tom Giles

To contact the reporters on this story: Serena Saitto in New York at ssaitto@bloomberg.net; Cristina Alesci in New York at Calesci2@bloomberg.net. Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.


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