Blackboard said to seek $800 mln for Cashnet; PE dominates process

  • Blackboard acquired Cashnet for $260 mln in 2016
  • Blackboard is said to seek $800 mln for Cashnet
  • Cashnet produces $60 mln Ebitda

Private equity is dominating Blackboard Inc’s sale of Cashnet, three sources said.

Only buyout shops remain in the Cashnet process, sources said. First-round bids were due in early December, with the auction currently in management presentations, people said. Second-round bids are due later this month, people said.

The auction has attracted the interest of firms including Thomas H. Lee Partners, Marlin Equity and GTCR.

Blackboard, a portfolio company of Providence Equity Partners, is seeking $800 million for Cashnet, one of the sources said, although other people said that price tag was high.

“It’s only PE there, so no strategics to add competitive tension,” one source said.

“It’s going well,” a second person said.

Deutsche Bank is advising on the process, Buyouts reported in September.

Cashnet provides electronic billing, payments and student payment plan services for more than 700 campuses. The company reaches 5 million students nationally. It produces about $60 million in Ebitda and was expected to command a low-double-digit multiple, Buyouts said.

Blackboard in August 2016 acquired the company, then known as Higher One Holdings, for $260 million. Months later, Jay Bhatt, Blackboard’s former CEO, joined THL in November 2016 as a managing director.

The Cashnet process was expected as Blackboard is dealing with a $1.43 billion debt load, Buyouts said.

Blackboard is a relatively long investment for Providence. The buyout shop took Blackboard private in October 2011, paying $1.64 billion for the edtech company.

Providence tried to sell Blackboard in 2015, seeking $3 billion for the company, Reuters said. That auction did not result in a buyer.

Providence Equity and THL declined comment. Executives for Blackboard, Cashnet, Deutsche Bank, Marlin and GTCR could not be reached for comment.

Action Item: Contact Blackboard CEO William Ballhaus at 202-463-4860