Instructure Pushes Forward With Thoma Bravo Acquisition, Forcing CEO To Step Down

Salt Lake City-based learning software developer, Instructure delivered an interesting one-two-punch announcement last week; the company is being acquired by private equity and growth capital firm, Thoma Bravo amid CEO and board member Dan Goldsmith announcing his abrupt and unexpected resignation.

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“The board of directors is grateful to Dan for his strategic guidance and leadership during his time at the company,” said Josh Coates, Executive Chairman of the Instructure Board of Directors. “We wish him all the best in his future endeavors.”

Goldsmith joined Instructure in 2018 and helped propel the company’s annual revenue above $250 million the following year. He also headed acquisitions of MasteryConnect and Portfolium.

The reason behind Goldsmith’s sudden resignation (or removal) has not been disclosed, though it has been speculated that it was done to streamline the completion of the transaction. He gave up 48% of his unvested Restricted Stock Units (RSUs) upon leaving.

Sources have expressed that Goldsmith will receive a “golden parachute compensation” of over $12 million. In the meantime, the company will form an office of the CEO made up of senior executives to lead the business while Instructure looks for a new chief executive officer to succeed Goldsmith. This comes as the company experienced a "wild 72 hours" last week, where they delayed the shareholders’ vote by two weeks. After two rejected offers, Thoma Bravo made a tender offer of $49.00 per share in cash on February 17.

Stockholder law firm, Bragar Eagel & Squire has also announced that it has launched an investigation into whether the board members of Instructure breached their fiduciary duties or violated the federal securities laws in connection with the company’s sale to Thoma Bravo.

“We encourage all stockholders to tender their shares in support of the transaction,” said Coates.

According to a press release, “The tender offer is scheduled to expire at one minute after 11:59 p.m., Eastern Time, on March 20, 2020, unless extended or terminated.”

After the buyout is completed, Thoma Bravo plans to increase Instructure’s investment in educational technology, innovation, and expand operations worldwide. Just as recently as 2017, the private equity firm acquired Frontline Education, an administrative and HR software solutions provider to educational organizations.