Ronald J. Packard, the founder and former CEO of K12 Inc., has resigned from the commercial education provider’s board to launch a new business, after participating in a purchase of some of his former company’s assets in postsecondary education and other areas.
Packard and Safanad Limited, a New York- and Dubai-based investment firm, announced the acquisition of portions of K12’s businesses, which collectively will become part of a new company, called Pansophic Learning. The businesses contributed an estimated $15 million to $20 million in revenues to K12 for fiscal 2014, estimated Trace Urdan, a senior analyst for Wells Fargo Securities in San Francisco.
In a statement, K12 said the sale involved its postsecondary business, as well as its interest in an existing Middle East joint venture currently operating with a Safanad Limited affiliate, and a private international brick-and-mortar school.
Pansophic Learning, which is based in McLean, Va., also acquired licenses to K12 curriculum and technology as part of the acquisition. The new company’s mission will be “to provide access to a high quality education for every student worldwide,” the release said.
Packard recently drew criticism in a lawsuit directed against K12 by a group of investors alleging that the publicly traded company made overly bullish statements about the company’s prospects, only to later report disappointing results. The legal action says that Packard cashed in on the favorable projections by selling millions of dollars worth of stock before the company’s stock fell. That lawsuit is still pending.
Pansophic Learning, which operates on three continents, plans to expand and integrate the acquired businesses with “other targeted investments in educational products, services and schools from pre-K to college,” the announcement said.
To that end, Pansophic and its holding company, Safanad Education, a subsidiary of Safanad Limited, are on the hunt for acquisitions both in the United States and globally, not only in the K-12 market, but also in postsecondary and early childhood education.
In an equity research brief he produced after the announcement, Urdan wrote that he has supported recent management changes that have taken place at K12, but “we had viewed Mr. Packard’s ongoing involvement, including management’s ability to access his expertise and existing relationships, as a positive.” Now, Packard’s association with K12 is in the approximately 170,000 shares he holds in the company, according to Urdan.
As for Pansophic Learning’s prospects, Urdan said in a phone interview that “it’s basically like K12 redux,” with Packard charting “new but familiar territory” bringing what he knows about building virtual schools and digital education to other countries.
For K12, Urdan predicted that investors would be “very happy to see [company leaders] focusing their efforts, and not chasing opportunities all over the world.”