Christopher Phillips

Thoma Bravo Instructure Acquisition

Blog Post created by Christopher Phillips on Dec 4, 2019

A space where news and reactions to the proposed Thoma Bravo acquisition can be gathered that would be of interest to the community. Please add additional resources, questions or concerns in the comments. 

News and Reactions

  1. Letter from Dan
    "Working with Thoma Bravo over the past weeks, it is apparent that they support our strategy for focus on continued investment in Canvas LMS, expanding our impact in education, positioning Bridge to be more successful, and being a well-run business. As a private company, we will be able to better control our future and execute on these strategic imperatives."
  2. Instructure Enters Into a Definitive Agreement to be Acquired by Thoma Bravo (Instructure Press Release)
    "The Instructure management team, led by CEO Dan Goldsmith, will continue to lead the Company in their current roles. Thoma Bravo will support Instructure as it increases investment in education technology innovation and expands internationally."
  3. Private Equity Firm Thoma Bravo to Acquire Instructure for $2 Billion (Phil Hill)
    "Obviously this is big news for the LMS market, and it is worth noting that in the press release Thoma Bravo specifically mentions Canvas but not Bridge, which should give a hint about future plans. And perhaps more importantly, the press release explicitly mentions future growth that will or could include M&A – Instructure buying other companies."
  4. New Ownership for an LMS Giant: Private Equity Firm to Buy Instructure for $2 Billion (EdSurge)
    "But whether the sale is good news for colleges and other education customers remains to be seen, Hill added. “It’s now a waiting game to see how their strategy changes,” he said. 'Don’t expect it to be the same.'"
  5. Canvas parent Instructure to go private in $2B deal (EducationDive)
    "How private equity will influence Instructure's operations largely remains to be seen. And as part of the deal, the company has 35 days to entertain other offers.'"
  6. Instructure—Creator of Canvas LMS—Acquired by Private Equity Firm for $2 Billion in Cash (EdWeek Market Brief)
    "Brian Jaffee, a principal at Thoma Bravo said, 'We’ve followed the impressive Instructure growth story for many years and believe Canvas is a highly unique vertical market SaaS leader with exciting scale and future growth potential.'"
  7. Seven Things We Mostly Know About the Planned Instructure Acquisition and Three We Don’t (Phil Hill)
    "What does this mean for Instructure’s future? One guess is to expect the Bridge separation with increased focus on the Canvas / academic business to happen quickly. Another guess is to expect Instructure to ramp up their corporate acquisitions starting in 2020."
  8. Insights From Instructure Preliminary Proxy Statement (Phil Hill)
    "I realize that the proxy statement is primarily driven by SEC rules, but Instructure is harming its brand by its consistent focus on monetization and shareholder value with no meaningful communication to customers or prospects (I do not consider the letter above meaningful). The academic LMS market deserves better from its market leader."
  9. Letter to Instructure (Ethical EdTech)
    "While debate continues regarding fair market price for the company (Hill, 2019b), there is much speculation within the Community and amongst stakeholders about the role being played in the sale by the student data Instructure has spent years collecting and harvesting to inform the company’s innovations."
  10. What’s the LMS Worth? (EconProph)
    "Underlying the valuation question though, is the real concern. Can we discern the plans and future for Canvas (and thereby schools, instructors, students, the higher ed system, pedagogy, etc) from this transaction? "
  11. Instructure’s Proposed Acquisition is a Bad Risk for Everyone (eLiterate)
    "Has Instructure provided customers with a detailed and credible enough strategic roadmap to inspire confidence that they have a more compelling alternative for growth? No, they have not. Has Dan Goldsmith thus far proven, lacking such a roadmap, that his reputation for performance alone is worth betting the company on? No, he has not. No smart PE company would make an attractive counter-offer under these circumstances. There is no sound investment thesis until Instructure is able to regain its footing as a product-led company."
  12. Instructure’s Better Possible Future (eLiterate)
    "Instructure's brand has, until now, been its primary and best product. It is still one of the best in the sector, even if it is getting a little ragged around the edges. Because the brand is still good, the company can still build the relationships it needs to make good acquisitions, evangelize those acquisitions to its customers, and work with its customers on even the most sensitive (and important) product research and development efforts."
  13. To Our Customers (Dan Goldsmith, Instructure CEO)
    "In December, we announced that Instructure had reached an agreement to be acquired by Thoma Bravo, LLC, a private equity investment firm. Our board has always had a financial responsibility to the shareholders of Instructure, but as you all know, key components of the financial health of any organization are ensuring that customers’ needs are being addressed and that innovation is continuing at a healthy pace. Financial health, customer commitment, and innovation are inextricably intertwined and must remain balanced. Thoma Bravo also appreciates this balance and shares our commitment to customer success."

Background Information

  1. Thomas Bravo Website
    "We are a leading private equity investment firm building on a 40-year history of providing capital and strategic support to experienced management teams and growing technology companies."
  2. Instructure Considering Sale Options (Phil Hill)
    "For academic community, it is worth noting that much of the investor-based pressure is for Instructure to focus more on supporting Canvas, not less. Instructure management has made it a point to say that they are increasing investment in Canvas, but today’s news puts even more emphasis on that need."
  3. Why Instructure’s News Matters: Market history (Phil Hill)
    "Why is a potential change as mundane as having Instructure’s shares traded in public markets vs. being owned by a larger company newsworthy?"
  4. Canvas LMS Provider Instructure Considers Sale (EdSurge)
    "The last time a publicly traded learning management system provider was taken private was Blackboard, back in 2011."

Reactions on Twitter

 

 

 

 

Other Conversations in the Community

I'm sure more news and reactions will be coming in and as I'll update this as they do - feel free add any links or questions in the comments, follow to stay up to date. It will be very interesting to understand what this means for the future of Canvas!

 

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