PE Deals

Silversmith’s EdTech Absorb Software comes to market

The company, which has 'just finished' its management presentations, received strong interest from private equity firms, sources say.

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Silversmith Capital-backed learning technology provider Absorb Software is up for sale, sources familiar with the process told PE Hub.

The company, which has “just finished” its management presentations, received strong interest from private equity firms, the people familiar said.

Shea & Co, a software-focused boutique investment bank, is advising the company on its sale, the sources said.

Absorb Software, based in Calgary, Alberta, Canada, 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.

The company generates C$45 million ($36 million; €30 million) in revenue and around C$20 million in EBITDA, the sources said.

However, according to the company’s announcement from January 11, Absorb achieved C$50 million in annual recurring revenue by the end of 2020 and grew its global enterprise customer base by more than 167 percent year-over-year.

In 2020, the business grew its customer base to 1,400 companies in 34 countries and saw 525 percent growth in regions outside of North America, the announcement said. Absorb also introduced “the industry’s only true all-in-one e-learning platform for enterprises,” per the announcement.

The business plays in the attractive EdTech learning space, which has seen an acceleration in demand and investment through the covid-19 and remote environment.

Private equity firms including Vista Equity, Francisco Partners and Insight Partners are likely to express interest in the process, some of the sources said.

Silversmith Capital Partners, a Boston-based growth equity firm with a focus on profitable healthcare and technology businesses, invested $59 million of growth equity capital in Absorb in September 2017.

The growth equity shop 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.

Absorb Software, Silversmith Capital and Shea & Co did not return PE Hub’s requests for comment.