Curriculum Associates, a major producer of print and online academic materials, announced today it will hand over control of its ownership to a foundation at Iowa State University—and that the company will eventually be sold to another buyer.
The Massachusetts-based business, which has been privately held for nearly 50 years, said it will gift the majority of its shares to the ISU philanthropy. Company officials said the move is compelled partly by tax reasons related to its charitable giving.
Iowa State will eventually seek to sell its shares of Curriculum Associates to fund efforts at the university. But that sale will come with an important provision: Curriculum Associates will have the right to approve the buyer.
The gift to Iowa State was officially made on Dec. 31. The ISU foundation will receive all of the gift shares—currently valued at $121 million.
Once the sale goes through, the foundation will gift $28 million of the proceeds to the Boston Foundation, a philanthropy that supports education.
Curriculum Associates CEO Rob Waldron said in an interview that the transaction will ensure that his organization can continue to stick to its core mission for many years to come.
“It’s not going to change anything about our mission, our product, or our services,” Waldron said. “Nothing about our company has changed…We believe creating change in this sector is a long-term thing.”
(Waldron serves on the board of EdWeek Market Brief, a business-focused service launched last year to explain the needs and priorities of K-12 schools to companies in the market.)
The decision to make the gift to Iowa State’s foundation was driven partly by changes in federal tax policy, Curriculum Associates officials said.
Initially, the company said it hoped to make substantial philanthropic contributions from its profits to various organizations through a charitable trust. But the structure of operating a for-profit company controlled by a charitable trust was nixed by the IRS, and so the decision was made to make direct gift of the company’s shares to Iowa State’s foundation.
(Curriculum Associates’ co-founder, Frank Ferguson, is a graduate of Iowa State University.)
Founded in 1969, Curriculum Associates says it serves an estimated 6 million students across all 50 states, in half of all U.S. districts. One of its best-known products, the online instructional and diagnostic tool i-Ready, is used by more than 1 million students daily, the company says.
Based in North Billerica, outside Boston, Curriculum Associates has gone through a period of rapid growth over the past few years. It employs more than 600 full-time workers, more than triple the number four years ago.
Waldron will have the right to approve or deny potential buyers of the company for a five-year period, the company told Marketplace K-12.
The CEO said he would hold potential suitors to a high standard, and that he had no interest in private-equity firms or other buyers interested in merely snapping up the company and trying to flip it for a quick profit.
“We don’t think that’s where innovation occurs,” Waldron said, calling the idea of getting puchased by a corporation that is solely focused on profit “wholly unappealing.”
“My interest is to find the Warren Buffett of mid-sized companies,” he added. “Someone who will buy it and hold it for 30 years.”