PowerSchool could be taken private in a deal worth roughly $6 billion, according to media reports.

Boston-based Bain Capital is in talks to purchase the K-12 administrative software company for a share price in the $20s, the Wall Street Journal first reported Wednesday, citing anonymous sources.

Shares in PowerSchool (PWSC) opened at $19.15 Thursday morning, a jump of nearly 20 percent from its stock price prior to the report. PowerSchool’s market cap, or value of its total outstanding shares, is at $3.14 billion.

In a statement provided to EdWeek Market Brief, a PowerSchool spokesperson said the company “does not comment on rumors and speculation,” and said that the company, “as the leading provider of cloud-based software for K-12 education in North America, is focused on delivering innovation, value and end-to-end support to our over 17,000 customers.”

A spokesperson for Bain declined to comment on the reports.

If the deal comes to fruition, it would bring PowerSchool back to the private market just three years after its July 2021 initial public offering. At the time, CEO Hardeep Gulati said the NYSE listing was “a key part” of the company’s strategy to continue building its platform, which includes a student information system and other data management tools for districts.

Based in Folsom, Calif., PowerSchool has traded hands numerous times since it was founded in 1997, including being owned by Apple, Pearson, and the private equity firm Vista Equity Partners.

Vista and buyout firm Onex, which invested in the company in 2018, remain significant stakeholders, Reuters reported.

The acquisition reports come after PowerSchool reported its first quarter earnings on Tuesday, when it said revenue jumped 16 percent year-over-year in the quarter to $185 million. It also reported a loss in the quarter of $22.8 million. Earnings before interest, taxes, depreciation, and amortization was $61.3 million, a 24 percent increase compared to the prior year period.

“These first quarter results showcase the robustness of software spend in [the] K-12 market and the continued demand and stickiness of our market-leading mission-critical solutions that drive better education outcomes, empower educators, and help districts run more efficiently,” Gulati told investors and analysts during its earnings call Tuesday morning.

A Recent State Deal

He highlighted one major sale in the quarter, the company’s new contract to provide the Indiana Department of Education with software to manage special education programs and compliance.

The deal, which represents approximately $5 million in subscription and support revenue and approximately $9 million in services revenue through 2025, was one of its “largest deals in recent history,” Gulati said.

Other drivers of growth have been the company’s expansion to international markets and its recent acquisitions, including its $38.2 million purchase of K-12 financial software provider Allovue in January, he said.

In April, the company was a target of a short selling report from Spruce Point Capital Management, which argued the company faced financial challenges due to the pending end of federal stimulus funding for school districts across the country. The report also questioned PowerSchool’s compliance with state data privacy laws.

Shares in PowerSchool slumped in the weeks after the report, dropping roughly 10 percent in its wake.

Gulati did not mention Spruce Point’s report during the earnings call but did discuss the end of stimulus funding. While some districts have used the federal emergency aid to fund the initial implementation of software systems, he said products like PowerSchool are largely covered by a different source of money — district’s regular operating budgets.

He also highlighted the company’s student data privacy and data security efforts. Those include its certifications from third-party industry groups; its participation in a student privacy pledge and the K-12 Education Technology Secure by Design pledge developed by the federal Cybersecurity & Infrastructure Security Agency; and its compliance with federal and state online privacy laws and student data protections.

It’s a “responsibility we take very seriously,” he said.

Image credit: iStock/Getty Images Plus

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See also: 

• PowerSchool, Major Ed-Tech Provider, Valued at $3.5 Billion Following Initial Public Offering
• Another Education Company Goes Public: Instructure IPO Gives Ed-Tech Firm $2.9 Billion Valuation
• Powerschool’s CEO on the Role of Learning Management Systems During Covid-19
• Powerschool Acquires Schoology, in Major Pairing of K-12 Information Platforms