Tech M&A: Blackboard Goes Private, eBay Goes Deeper on Mobile, and Twitter Eats Its Young Again

By Damian Thompson An education software player privatizes, a payments behemoth gets bigger, and a social network player gains influence. Blackboard Graduates to the Middle of the Class? Blackboard Inc BBBB announced today that it has agreed to be acquired by a group of investors lead by Providence Equity Partners. Blackboard primarily creates learning and education software for schools. “Through our conversations, Providence has expressed interest in our business model,” said Chasen, the company's chief executive. “We are very much not only going to continue to develop and bring new products to market in those areas, but with Providence I think we can accelerate some of that.” This isn't the first for-profit educational purchase Providence has made, having earlier purchased Education Management Corporation and Archipelago Learning. Blackboard is also no stranger to acquisitions having acquired Presidium for $53 million in January of this year, and Saf-T-Net for $33 million in March of 2010. (To read Adam Katz's observations on real estate and the housing market, click here.) Once the deal is approved by a majority of shareholders, Blackboard will return to being a privately held company. It has indicated that it will remain headquartered in Washington and will continue to be led by its senior management team; however expect some changes once Providence takes control. Blackboard was founded in 1997 during the dot-com boom, but the company navigated the crash and turned it into a global business that made a $16.6 million profit last year. The challenge for Blackboard, the clear market leader in its space, will be to find new revenue sources to achieve the high growth you would expect Providence to covet. Deal Deets: The transaction is expected to close in the fourth quarter of this year. It is an all-cash offer earning Blackboard's stockholders $45 per share. That's a 21% premium over the $37.16 per share closing price on April 18, the day before the company announced it was entertaining buyout offers. Shares closed at $44.17 on Friday. EBay Goes Micro Crazy for Zong EBay Inc EBAY announced this week it has agreed to acquire mobile payments provider Zong for $240 million in cash to increase the reach of its PayPal solution into micro-transactions. Zong is a mobile-payments platform provider that facilitates carrier-direct billing for digital goods and services. Users pay for their purchases using their mobile phone number and payment is billed to the customer's wireless account. (To see Kevin Depew's roundtable on social, political, economic polarization threatening recovery, click here.) The company was a developer of Facebook Credits and has partnered with many of the social gaming and virtual worlds' biggest companies, including Zynga, IMVU, Playdom, and Zwinky. The company reaches 3.2 billion mobile users across more than 250 carriers. "Our customers love the convenience of paying with their mobile numbers -- a number they know by heart, and a device that they always have with them," David Marcus, CEO of Zong, said in a statement. "We look forward to extending our services to PayPal's more than 9 million merchants around the world. And we're committed to working with carriers and merchants to help them drive more sales across devices." Mobile payments are quickly becoming a very hot and crowded space with competition from the likes of Boku Inc., Digsby Inc., Mopay Inc., Mobibucks Corp., Payfone Inc. and Square Inc. Ypou also have established companies like Google Inc. GOOG and Intuit Inc. INTU, working on mobile payment platforms. Technology consultancy Yankee Group predicts that global mobile transactions will grow from $241 billion in 2011 to more than $1 trillion by 2015. (To read The Chart Lab's analysis of the S&P 500 and the anticipated new highs, click here.) EBay has been aggressively spending its money these days bolstering its offering, most recently acquiring GSI Commerce for more than $3 billion (see M&A News: eBay Buys GSI Commerce, Salesforce Picks Up Radian6) and other companies, including the purchase of Where, Fig Card, and Milo (see Tech M&A: eBay Goes Local, Wal-Mart Goes Social, and Seagate Goes Bigger). Deal Deets: The acquisition is an all-cash deal for $240 million and is expected to close in the third quarter of 2011. Twitter Again Attacks the Ecosystem by Buying BackType Twitter (recently valued at $7 billion) is buying BackType, a social-media analysis company. This is another in a series of moves by Twitter to control its ecosystem by buying or developing features that are being offered by third parties. You can see this in its recent TweetDeck acquisition and the new feature of adding native photo sharing. BackType's primary offering, BackTweets, informs its users how tweets about them were circulating through Twitter, and how influential people were on Twitter for a company or topic. This is data that marketers want to know users be it on Twitter, Facebook, or another service, in order to determine advertising rates. The free Twitter analysis service "BackTweets" will stay up and running for current users, but won't be available for new users. It is largely speculated that a major part of BackType's appeal to Twitter was Storm, the distributed and fault-tolerant stream processing system developed by BackType in-house. It is unknown how this technology will be included into the current offering. As Google has finally launched a potentially successful social network, Google+, the acquisition of BackType makes sense. There is a mad rush as the social networks race for a billion users but it is expected it will eventually shift from pure number of users to how influential those users are. Companies like Klout are pioneering the influence-measuring business, but it is early days. The owner of the best technology to measure influence would have a significant advantage. Deal Deets: Terms of the deal were undisclosed. BackType has raised $1.3 million in venture capital since launching out of Y-Combinator in 2008. To read the rest, head on over to Minyanville.