Thoma Bravo to buy Instructure for about $2 bln

Thoma Bravo has agreed to acquire Salt Lake City-based Instructure, a maker of educational software, for about $2 billion. According to terms of the deal, Instructure stockholders will receive $47.60 in cash per share. J.P. Morgan Securities LLC is serving as financial adviser to Instructure while Cooley LLP is providing legal advice. And, Kirkland & Ellis is serving as legal adviser to Thoma Bravo.

PRESS RELEASE

SALT LAKE CITY, Dec. 4, 2019 /PRNewswire/ — Instructure (NYSE: INST) today announced that it has agreed to be acquired by Thoma Bravo, LLC, a leading private equity investment firm, in an all-cash transaction that values Instructure at an aggregate equity value of approximately $2 billion. As part of the terms of the agreement, Instructure stockholders will receive $47.60 in cash per share. The price per share represents an 18% premium to the Company’s 3-month volume-weighted average price as of October 27, 2019, the day prior to the Company’s third quarter earnings call at which it announced a strategic review for its Bridge business.

“After a thorough review of strategic alternatives, the Instructure Board of Directors is pleased to reach this agreement,” said Josh Coates, Executive Chairman of the Board at Instructure.

The Instructure management team, led by CEO Dan Goldsmith, will continue to lead the Company in their current roles. Thoma Bravo will support Instructure as it increases investment in education technology innovation and expands internationally.

“Instructure believes the opportunity to become a private Company will provide additional flexibility and position us to invest more strategically to drive innovation for our customers,” said Goldsmith. “We look forward to working closely with all parties to complete this transaction and enter into our next chapter of growth and industry leadership.”

“Instructure’s Canvas product is the gold standard for learning management systems in the global education market,” said Holden Spaht, a Managing Partner at Thoma Bravo. “We are excited to partner with Dan and the senior management team to support continued investment and innovation in the Company’s market leading products and world class customer support.”

Brian Jaffee, a Principal at Thoma Bravo added, “We’ve followed the impressive Instructure growth story for many years and believe Canvas is a highly unique vertical market SaaS leader with exciting scale and future growth potential. We look forward to building on the strong momentum in the business and accelerating growth and product investment both organically and through M&A.”

The members of Instructure’s Board of Directors have unanimously approved the transaction and recommended that its stockholders approve the merger. A special meeting of Instructure’s stockholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission (“SEC”) and subsequent mailing to its stockholders. Instructure’s headquarters will remain in Salt Lake City, Utah, with regional offices across the United States and abroad. Closing of the transaction is subject to approval by Instructure stockholders and certain regulatory and antitrust authorities and the satisfaction of customary closing conditions. The transaction is expected to close in the first quarter of 2020 and is not subject to a financing condition. Upon completion of the acquisition, Instructure will become wholly-owned by Thoma Bravo.

The agreement includes a 35-day “go-shop” period expiring on January 8, 2020, which permits Instructure’s Board of Directors and advisors to solicit alternative acquisition proposals from third parties. Instructure will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement. There can be no assurance that this “go-shop” will result in a superior proposal, and Instructure does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or is otherwise required.

J.P. Morgan Securities LLC is serving as the exclusive financial advisor to Instructure and Cooley LLP is serving as its legal advisor. Kirkland & Ellis is serving as legal advisor to Thoma Bravo.

ABOUT INSTRUCTURE
Instructure helps people grow from the first day of school to the last day of work. More than 30 million people use the Canvas Learning Management Platform for schools and the Bridge Employee Development Platform for businesses. More information at www.instructure.com.

ABOUT THOMA BRAVO, LLC
Thoma Bravo is a leading private equity firm focused on the software and technology-enabled services sectors. With a series of funds representing more than $35 billion in capital commitments, Thoma Bravo partners with a Company’s management team to implement operating best practices, invest in growth initiatives and make accretive acquisitions intended to accelerate revenue and earnings, with the goal of increasing the value of the business. Representative past and present portfolio companies include industry leaders such as ABC Financial, Blue Coat Systems, Deltek, Digital Insight, Frontline Education, Global Healthcare Exchange, Hyland Software, Imprivata, iPipeline, PowerPlan, Qlik, Riverbed, SailPoint, SolarWinds, SonicWall, Sparta Systems, TravelClick and Veracode. The firm has offices in San Francisco and Chicago.