Blackboard received $80 million in financing from Credit Suisse First Boston to back its $180 million acquisition of WebCT. The deal consists of a five-year, $10 million revolver and a six-year, $70 million term loan "B." Pricing is being talked at the LIBOR plus 2 1/2-2 3/4% range on both tranches. The acquisition is expected to close by the end of this year or in early 2006.
"WebCT has been a competitor of Blackboard's since its inception," a Blackboard spokesman said. "A transaction historically made sense but until Blackboard went public, we didn't have the means or the ability to complete the transaction." He explained that although the deal may have been contemplated for a while, the groups did not begin working in earnest until this year.
Headquartered in Washington, D.C., Blackboard provides software and services to the education industry. Its products include Blackboard Academic Suite and the Blackboard Commerce Suite. WebCT is located in Lynnfield, Mass., and provides e-learning systems and is used in more than 70 countries. Following the completion of the transaction, the combined company will operate under the Blackboard name, but will retain the WebCT operations.
CSFB led Blackboard's initial public offering in 2004 and acted as its financial advisor during this transaction. Wilmer Cutler Pickering Hale & Dorr and McDermott, Will & Emery served as Blackboard's legal advisors. WebCT used Goldman Sachs as its financial advisor and Choate, Hall & Stewart and White & Case as its legal advisors. John Giordano, WebCT executive v.p., cfo and treasurer, referred calls to Blackboard.