Blackboard Chalks $1.64B Leveraged Buyout With Providence Equity

Education software maker Blackboard (NASDAQ:BBBB) reached a $1.64 billion deal on Friday to be taken private by Providence Equity Partners.

The Providence, R.I.-based private-equity firm, which has $23 billion of capital under management, agreed to pay $45 a share in cash for Blackboard, translating to a 4% premium on the companys Thursdays close. It also marks a 21% premium from April 18, the day before Blackboard revealed it was up for sale.

The deal, which includes the assumption of about $130 million in net debt, is expected to close during the fourth quarter.

This compelling transaction is the result of a comprehensive evaluation of our strategic alternatives, and we firmly believe it delivers significant value to all Blackboard stockholders," CEO Michael Chasen said in a statement.

Providence Equity Partners said it plans to keep Blackboard headquartered in Washington, D.C. and led by existing senior management. The PE firm already has a number of investments in the education industry, including Archipelago Learning, Ascend Learning and Study Group.

"In Providence, we will have a partner who brings a deep understanding of the international education marketplace and shares our vision of providing educators with exceptional technology solutions and services to meet their evolving needs over the long-term, said Chasen.

The Blackboard deal will be financed through a combination of equity and debt, which is being provided by Bank of America Merrill Lynch (NYSE:BAC), Deutsche Bank (NYSE:DB) and Morgan Stanley (NYSE:MS)

Shares of Blackboard gained 1.80% to $44.17 ahead of the opening bell Friday.