School Family Media

Sold To Private Equity Group based in California

Seller:             School Family Media

Buyer:             Private Equity Group based in California

What made the business attractive to Buyers?

• Deep ties to parents of school age children via Parent Teacher Organizations
• Niche SaaS to connect Students, Teachers and Retailers in the Back to School Supplies marketplace
• Integrated with key online education platforms
• Consistent year-round revenue programs
• Strong relationships with consumer products companies
• Annual growth in revenues and in EBITDA
• Innovative Services to enhance revenues
• Ability to create custom solutions for customers

Challenges:

• Parental adoption of the innovative SaaS teacher list program
• Potential competition with Amazon
• Some legacy PTO related programs were decreasing in revenues while increasing costs.

The Company is a leader in the PTO advisory and services space.  Historically they produced magazines and trade shows for the parents who run local PTO’s. The company received revenue from consumer product manufacturers who desire to connect with parents of school age children. As revenue from the traditional business stagnated, the team then developed software and a system to capture 1,800,000 teachers’ back to school supply lists.  Access to the teacher lists for product placement encouraged the product manufacturers to increase payments to the company. As a last step, the company matched each required product (and teacher suggested items – tissues, wipes, etc.) to national retailers’ sites and created a sales platform for the retailer to conduct commerce.

The company single handedly reshaped how students and parents prepare for the new school year.

Why did the owners want to sell?

There were two dynamic owners of the business.  One had already transitioned out of the business to follow a “calling” to a leadership role with a local private school.  Since he was not focused on the business day-to-day, he desired to reduce his personal risk exposure. The second owner was shouldering all of the responsibilities of growing this rapidly expanding business.  He desired to both reduce his risk exposure and add management depth to the organization to prepare for the next leg of growth.

Beacon’s Role and Results:

Beacon prepared an in-depth package telling the story of both the legacy division and the new faster growing SaaS opportunity.  They presented a summary to 319 private equity investors intersecting both the SaaS space and the Education industry.  This led to deeper conversations and greater disclosure to 87 of these prospects, 16 of which submitted to Beacon an Indication of Interest (IOI).  The owners reviewed these letters and invited four of these groups to half day meetings at the company and meetings with key employees.  Each of these four potential buyers then submitted more specific Letters of Interest (LOI).  The owners negotiated with the top two bidders and reached a mutually acceptable agreement to purchase the business.

Result:

The Owners’ successfully sold their business for their desired price in an all cash deal.  The owner who remained with the business accepted a leadership position with the new owners and an exciting employment package which enables him to benefit from the future growth of the business.   The owner who had stepped away remains an advisor to the new management board.