Silversmith sees 5x return on Absorb Software

With the sale to WCAS, the Canadian learning-management software business is valued north of $500m.

Silversmith Capital Partners is poised to make 5x its money on the sale of learning-technology provider Absorb Software, sources familiar with the deal told PE Hub. 

The firm, less than four years into its investment, said Tuesday it had agreed to sell the Canadian software business to Welsh, Carson, Anderson & Stowe. 

The investment achieves a greater than $500 million valuation for Absorb Software, the news release said. Silversmith, a Boston-based growth equity firm with a focus on profitable healthcare and technology businesses, injected $59 million in growth equity capital in Absorb in September 2017. 

Absorb, based in Calgary, Alberta, provides learning management software, course building, and authoring tools for businesses, higher education, government and non-profit agencies around the world. Absorb has offices in London, Dublin, Shanghai, Sydney, Boston, Tampa and Salt Lake City.  

Shea & Co, a software-focused boutique investment bank, advised the company on its sale process, as first reported by PE Hub earlier this month. 

At that time, sources said the company generated C$45 million ($36 million) and C$20 million in revenue and EBITDA, respectively.  

Silversmith in September closed on its third fund, Silversmith Capital Partners III, at its target and hard-cap of $880 million. The firm currently has $2 billion in capital under management. 

Silversmith declined to comment.