December 23, 2019 / 3:18 PM / a month ago

Instructure says it met with dozens of potential buyers before Thoma Bravo deal

(Reuters) - U.S. educational software company Instructure Inc (INST.N) said on Monday it met with dozens of potential buyers over months before agreeing on a $2 billion deal with private equity firm Thoma Bravo, which offered the highest price.

This follows criticisms from top shareholders Praesidium Investment Management and Rivulet Capital that Instructure failed to conduct an exhaustive search and settled on a $47.60 per share deal with Thoma Bravo too quickly earlier this month.

Instructure said in a regulatory filing that its board did not wanted to extend the sale process for a long time for reasons including any negative impact from media coverage.

The company added that none of the potential buyers who submitted an indication of interest submitted a definitive written proposal to acquire Instructure, except Thoma Bravo and another firm.

Instructure said it also met with five potential financial advisers in January this year before determining that JP Morgan should serve as the exclusive financial adviser for its deal talks.

On Oct. 31, Reuters reported that activist hedge fund Sachem Head Capital Management had built a stake in the company and was pushing for a full sale process. Days later Praesidium also joined the public push for the company to consider a sale.

Praesidium is Instructure’s largest shareholder, with a 7.63% stake, while Rivulet holds about 5.23%, according to Refinitiv data.

Instructure’s share price had climbed to $53 by late November after Praesidium and Sachem Head Capital Management publicly pushed for a sale of the company. The shares were last down 0.7% at $48.84.

Reporting by Munsif Vengattil and Svea Herbst; Editing by Maju Samuel

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