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CORRECTED-Bertelsmann nears investment in HotChalk - sources
September 4, 2015 / 8:11 PM / 2 years ago

CORRECTED-Bertelsmann nears investment in HotChalk - sources

(Corrects to remove ticker symbol metadata for Mr Green & Co publ AB ; In paragraph 1 corrects company name to Bertelsmann SE & Co KGaA and corrects company ticker symbol to .)

By Liana B. Baker

Sept 4 (Reuters) - Bertelsmann SE & Co KGaA, Europe’s largest media group, is close to acquiring a minority stake in learning technology firm HotChalk, according to people familiar with the matter, as the educational technology sector continues to grow.

Bertelsmann is leading a funding round that could value the Campbell, California-based company at $600 million to $800 million, the people said this week. Bertelsmann may use one of its subsidiaries for the investment, which is still under negotiation, the people added.

The sources asked not to be named because the discussions are confidential. A spokesman for HotChalk declined to comment, while Bertelsmann did not respond to a request for comment.

Germany’s Bertelsmann, which controls broadcaster RTL and co-owns book publisher Penguin Random House, said last year it would devote a significant amount of the 3 billion euros ($3.8 billion) it had earmarked for acquisitions to the education sector, in a bid to diversify.

The privately held company purchased the training software company Relias Learning from private equity firm Vista Equity Partners Management LLC for $540 million last year, marking its biggest acquisition in the United States since it took over Random House in 1998.

HotChalk, which launched in 2004, sells software to universities and colleges that enables them to put their degree programs online and provides technical support.

The education technology sector has been particularly active in recent months for dealmakers. McGraw-Hill Education Inc, one of the big three educational publishers, on Friday filed with U.S. regulators an initial public offering. Reuters previously reported the company had hired underwriters for an IPO valued at $5 billion to $6 billion.

BlackBoard Inc, whose custom software allows higher education students to collaborate on assignments and communicate with teachers, is also exploring a sale that could value it at $3 billion or more, including debt, Reuters reported in July.

HotChalk had hired Citigroup Inc to assist it with a fundraising round of at least $75 million, its largest to date and its first since the financial crisis, Reuters reported last month. (Reporting by Liana B. Baker in New York; Editing by Richard Chang)

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