Private equity behemoth KKR & Co. (KKR) is acquiring online education platform Instructure Holdings (INST) for $4.8 billion. After months of vying for the latter, KKR has finally struck the deal. In a definitive agreement to buy Instructure, KKR will offer $23.60 per share in an all-cash deal. The price represents a 16% premium to INST’s closing share price of $20.27, recorded on May 17, 2024.
The deal is expected to close later this year, subject to shareholder approval and other customary closing conditions. Following the deal’s completion, Instructure shares will be delisted and it will cease to be a publicly traded company.
Instructure Holdings is a learning management system and the operator of Canvas. The education technology platform boasts over 30 million educators and learners at more than 6,000 organizations globally. The company recently acquired the academic credential management platform Parchment for $835 million.
Further Details of the KKR-Instructure Deal
Interestingly, another software investment firm, Thoma Bravo LLC, has a majority stake in Instructure (nearly 84%), which will be fully acquired by KKR. Instructure’s current CEO, Steve Daly, will continue to lead the firm. KKR will buy Instructure through its North America Fund XIII.
Instructure has seen several reorganizations in the past. It went private in 2020 in a $2 billion acquisition by Thoma Bravo. This was followed by a stock market return in 2021. After the latest buyout deal by KKR, Instructure is expected to receive tremendous support and financial backing from KKR to boost its edu-tech platform offerings.
Is KKR a Good Stock to Buy?
With ten Buys and one Hold rating, KKR stock has a Strong Buy consensus rating on TipRanks. The average KKR & Co. price target of $124 implies 6.3% upside potential from current levels. Shares have gained 41.4% so far this year.
Is Instructure a Good Stock to Buy?
Following the news of KKR’s acquisition, several analysts downgraded INST stock to a Hold rating from Buy. On TipRanks, INST has a Moderate Buy consensus rating based on four Buys and five Hold ratings. The average Instructure price target of $26.72 implies 15.2% upside potential from current levels.
