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Blackbaud Drops $750 Million For Everfi
Blackbaud’s Revenue Sags, But Margins Up Double Digits

Nonprofit software technology giant Blackbaud has made its largest acquisition ever, purchasing  EVERFI, a corporate social impact firm, for $750 million.

Under the terms of the agreement, EVERFI shareholders will receive total consideration of approximately $750 million, subject to certain customary adjustments. The transaction is approximately $450 million in cash and 3,844,423 shares of the company’s common stock, valued at approximately $300 million. The cash portion was financed with a combination of cash on hand and new borrowing under Blackbaud’s credit facilities, according to a press release from the Charleston, S.C.-based firm.

Blackbaud (BLKB) stock closed at $79.39 per share today and was up 13% after hours to $90.

It’s been two years since Blackbaud’s last acquisition – employee engagement software company YourCause for $157 million – which had been its largest since President and CEO Mike Gianoni took the helm in January 2014. Prior to the $750-million deal for EVERFI, Blackbaud had made eight acquisitions totaling about $757 million during his tenure:

In 2012, Blackbaud acquired Austin, Texas-based rival Convio for $275 million.

Headquartered in Washington, D.C., EVERFI has pioneered the field of Impact-as-a-Service™ (IaaS), reaching more than 45 million learners globally through its technology and learning platform. It also delivers information to corporate partners that measures the impact of educational programs in support of environmental, social and governance (ESG) and corporate social responsibility (CSR) goals.

“As companies continue to invest further in ESG and CSR programs to both give back and meet regulatory demands, they need a partner who can help connect their philanthropic goals to meaningful social impact opportunities,” Gianoni said via a statement announcing the deal today.

The deal brings together a vast network of K-12 schools, a strong enterprise customer base, recognized excellence in the ESG and CSR sectors, and complementary offerings that will grow the IaaS vision. EVERFI’s executive team and Founder and CEO Tom Davidson will join Blackbaud focused on accelerating expansion efforts.

Blackbaud and EVERFI have similar cultures and a strong sense of purpose, according to Davidson. EVERFI’s software powers some of the largest ESG and CSR initiatives in the world, he added.

The acquisition doubles Blackbaud’s Total Addressable Market (TAM) to more than $20 billion, with more than half of Blackbaud’s addressable opportunity now in the corporate sector, underpinned by long-term ESG growth trends and strong enterprise corporate relationships.

EVERFI is expected to add an estimated $120 million in 2022 revenue to Blackbaud, with a year-on-year growth rate approaching 20%. The acquisition combined with recent company performance allows Blackbaud to significantly pull forward its timeline to 2022 for achieving its long-term goal of mid-to-high single-digit organic revenue growth.

The addition of EVERFI, which was founded in 2008, coupled with Blackbaud’s existing YourCause offerings, will enable corporate customers to accelerate their programs’ impact in the social good community. The two companies have minimal customer overlap, with EVERFI having a presence in the K-12 public school space while Blackbaud is in the K-12 private school and higher education markets.

Goldman, Sachs & Co. served as exclusive financial advisor to EVERFI, and DLA Piper served as legal counsel. Sidley Austin LLP served as legal counsel to Blackbaud.

The company expects pro forma net leverage at closing to be approximately 3.4x and anticipates rapid deleveraging driven by strong free cash flow, consistent with Blackbaud’s previous practices regarding leverage following acquisitions.

Blackbaud and EVERFI executives will comment on the acquisition during a live, 30-minute conference call scheduled for Tuesday at 8 a.m. ET. Analysts, investors, press and other interested parties can participate in the call by dialing 1-877-407-3088 (US/Canada) or by joining the webcast via Blackbaud’s Investor Relations webpage.