Goldman agrees to take edtech Kahoot private

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Goldman Sachs’ asset management arm and General Atlantic are set to scoop up a Norwegian educational technology group in an all-cash private-equity deal worth close to $2bn, ending a bumpy turn on the stock market.

Kahoot’s board of directors recommended the offer of NKr35 a share, which values the company at NKr17.2bn ($1.7bn), a statement on Friday said. The company’s shares shot up about 12 per cent to NKr34.8 in the wake of the announcement.

Shares in the Oslo-based company, with its online quizzes, surged during the Covid-19 pandemic when restrictions pushed schools and universities online. Since September 2021 however such enthusiasm has waned and its share price has halved.

Goldman Sachs Asset Management plans to invest in the company’s expansion and take advantage of the growing market for digital learning tools including in areas such as compliance training.

General Atlantic has held a 15 per cent stake in Kahoot since September when the US private equity firm bought the holding from SB Northstar, a now defunct hedge fund owned by Japanese conglomerate SoftBank, that suffered heavy losses from the investment.

SB Northstar’s bet on Kahoot, Swedish software group Sinch and THG proved disastrous. The fund was shut down after racking up close to $6bn in losses. Nordea Bank estimated SoftBank invested an “average price of Nkr63” a share in Kahoot, implying a loss topping 70 per cent.

Kirkbi, an investment vehicle run by Lego’s founding family, and members of Kahoot management including chief executive Eilert Hanoa are also co-investing.

About a third of Kahoot shares have been committed to the offer, with Hanoa expected to remain at the helm of the group.

In March 2021, the company launched a “re-IPO” to move to a main market listing away from Oslo’s junior market. However, since then Kahoot’s shares have languished.

The acquisition offer for Kahoot represents a 53 per cent premium to the closing price on the Oslo Stock Exchange on May 22, before key disclosures involving co-investors’ stock positions.

Second-quarter adjusted earnings before interest, taxes, depreciation and amortisation rose 60 per cent to about $11mn from a year ago.

Private equity investors have been attracted to acquisitions of listed companies this year owing to falling valuations on public markets, amid a broader dearth of dealmaking including between buyout firms.