European buyout firm Charterhouse Capital Partners LLP is nearing a deal to acquire education software provider Skillsoft Ltd for more than $2 billion, people familiar with the matter said on Thursday.
The deal, which is expected to be announced in the coming days, will likely value Skillsoft at around $2.3 billion, including debt, one of the people said.
This would mean that Skillsoft’s current private equity owners – Berkshire Partners LLC, Advent International Corp and Bain Capital LLC – stand to make around three times their money on the sale of the company, that person added.
Charterhouse emerged as the lead contender for Skillsoft following an auction that also drew a binding bid from Providence Equity Partners LLC, the people said, asking not to be identified because the negotiations are private.
Charterhouse, Providence Equity, Berkshire Partners, Advent and Bain declined to comment. Representatives for Skillsoft did not immediately respond to requests for comment.
Skillsoft provides electronic learning solutions to more than 6,000 customers globally, including companies and governments. It uses cloud computing, which allows clients to reduce costs by ditching bulky local servers for network-based software and storage in remote data centers.
The Nashua, New Hampshire-based company was taken private by Berkshire Partners, Advent and Bain in 2010 for $1.1 billion. It reported adjusted earnings before interest, tax, depreciation and amortization of $139.2 million for the 12 months ended January 31, 2013, up from $111.1 million the year before.
The corporate education and training market is highly fragmented and competitive, with low barriers to entry. One of Skillsoft’s competitors, Cengage Learning, which is also a major textbook publisher, filed for Chapter 11 protection last summer and won court approval on Thursday to emerge from bankruptcy.
Renaissance Learning Inc, another cloud-based educational software firm geared toward school children, said on Thursday it would be acquired by private equity firm Hellman & Friedman LLC for $1.1 billion, just one month after Google’s late-stage investment arm, Google Capital, invested in the same company at a $1 billion valuation.
Berkshire Partners, Advent and Bain committed at least $510 million in equity when they acquired Skillsoft in 2010, according to a credit research note at the time by Moody’s Investors Service Inc.
Skillsoft’s owners had tapped Deutsche Bank AG to run an auction for the company, Reuters reported in January.
(Reporting by Soyoung Kim, Greg Roumeliotis and Nadia Damouni. Editing by Andrew Hay and Lisa Shumaker)Get your FREE trial or subscribe now to Buyouts to find new deal opportunities, super-charge your fundraising efforts and track top managers.