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Renaissance Learning receives rival buyout offer

by Lou Whiteman  |  Published August 26, 2011 at 10:02 AM
ComputerClass227x128.pngEducational software provider Renaissance Learning Inc., which last week agreed to go private in a deal valued at $440 million, late Wednesday learned of a competing $455.1 million offer from a private equity-backed rival.

Wisconsin Rapids, Wis.-based Renaissance said the unsolicited, nonbinding proposal from Plato Learning Inc. offers $15.50 per share in cash for the company. Renaissance said its board has determined that the Plato offer "could reasonably be expected" to lead to a superior proposal to its existing $14.85 per share buyout by Permira. The company added that its board expects to enter into a confidentiality agreement with Plato.

Renaissance provides learning software used in about 70,000 schools in the U.S., Canada and the U.K., offering tools to help assess and monitor educational progress. The company also operates seven locations in the U.S.

Plato, based in Bloomington, Minn., provides computer-based and e-learning instruction for kindergarten through adult learners. The company, which last year was acquired for $143 million by Thoma Bravo LLC, is offering to buy Renaissance with equity financing from Thoma Bravo, HarbourVest Partners LLC and J.P. Morgan Chase & Co. as well as debt.

Renaissance in its statement announcing the rival bid said it has received a letter from counsel to Permira asserting the view that the Plato proposal does not represent a superior proposal. The company said that its board for now continues to recommend approval of the Permira proposal, warning "there can be no assurance" that Plato will be able to obtain financing to complete its deal.

Company co-founders Terrance and Judith Paul, who together with affiliates and family members own 69% of Renaissance's outstanding shares, had agreed to vote in favor of the Permira transaction.

Goldman, Sachs & Co. served as adviser to Renaissance's board, with Godfrey & Kahn SC acting as legal counsel to the company and Sidley Austin LLP advising the independent members of Renaissance's board.

Mayer Brown LLP's Scott Davis, Bill Kucera, Stu Rozen and Rich Assmus acted as legal advisers to the Paul family.

Morgan Stanley serves as lead financial adviser to Permira; co-adviser RBC Capital Markets is providing debt financing for the transaction.

Skadden, Arps, Slate, Meagher & Flom LLP's Kenton King, Allison Schneirov and Stephanie Teicher are providing legal advice to Permira.
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Tags: equity financing | Goldman Sachs | HarbourVest Partners | J.P. Morgan | Morgan Stanley | Permira | Plato Learning Inc. | RBC Capital | Renaissance Learning Inc. | Sidley Austin | Skadden Arps | Thoma Bravo

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