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Thoma Bravo snaps up Plato Learning

|Includes: Plato Learning, Inc. (TUTR)

Private equity groups are showing signs of life again, though in many ways they are still a shadow of their former self, restricted by reduced leveraging capability and a healthy dose of scepticism from fund managers when companies taken private are recycled back down the IPO route a few years later.

Nonetheless, a number of small private equity transactions are still occurring each week, and this morning another one was announced when Plato Learning (NASDAQ:TUTR), a adult online learning specialist, confirmed that it will be acquired by Thoma Bravo.

Under the terms of the offer, Plato shareholders will receive US$5.60 in cash per share, which according to Plato, is a 30% premium over the average closing price in the 30 day period up to March 25, 2010 (the day before the bid).  On a one year chart, this looks like a pretty good deal for shareholders, but longer term investors probably won’t be celebrating as much.

"Our agreement with Thoma Bravo represents an attractive valuation for our shareholders, and we look forward to closing the transaction as quickly as possible," said Vin Riera, PLATO Learning's President and Chief Executive Officer. "We also look forward to partnering with Thoma Bravo in continuing to focus on delivering high quality PLATO Learning solutions to our customers."

Plato Learning provides computer-based and e-learning instruction for kindergarten through adult learners, offering reading, writing, math, science, social studies, and life and job skills.

Yesterday Plato reported total revenues in the first quarter of US$15.6 million, down $0.4 million from the corresponding period in the previous year. Net income for the first quarter was $1 million, or 4 cents per share, and cash balances were $27.7 million.

Disclosure: no positions