As educational technology adoption soars, Bain Capital announced its $5.6 billion acquisition of PowerSchool Holdings, Inc. Currently listed on the NYSE, PowerSchool will go private in the all-cash deal.
“PowerSchool is a global education technology company supporting over 55 million students and over 17,000 customers in more than 90 countries,” according to the deal’s press release. “The Company brings together the best of K-12 educational and operational technology to support every step of the learning journey. PowerSchool will remain a standalone company, and its business operations and customer service will continue without interruption.”
K-12 education technology spend is projected to boom at a compound annual growth rate of 25.2% from 2023-2032. Educators spent an estimated $18.5 billion on tech products in 2023, including the hardware, software, and other digital tools that enhance learning and assist teachers. This spending is projected to increase to 132.4 billion by 2032.
Source: Market.us
Educational technology adoption was spurred by the Covid-19 pandemic. As schools were abruptly closed and forced to switch to remote education during lockdowns, educators scrambled to adopt online learning tools so they could still teach students from their homes. Videoconferencing, for example, was at 51% mainstream adoption in 2019 but jumped to 81% by 2021.
How the Pandemic Boosted Ed Tech Adoption
Source: Campus Technology
“The pandemic pushed schools of all types … to invest in novel forms of technology or reinvest in existing capabilities,” according to the 2021 Changing Landscape of Online Education. “COVID-19 has closed technology adoption gaps faster and more decisively than anything previous.”
Once schools began using these technologies, most continued using Edtech after the lockdowns, as “Schools and institutions globally have come to realize the potential of technology in enhancing the learning process,” according to Market.us. As full disclosure, this columnist serves on the board of, and owns a substantial interest in, an educational technology company, so I have been bullish on the sector for years.
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, Bain is advised by Ropes & Gray LLP while PowerSchool is advised by law firms Kirkland & Ellis LLP and Freshfields Bruckhaus Deringer LLP and financial advisers Goldman Sachs & Co. LLC and Centerview Partners LLC.