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Blackboard bought for $1.64 billion

Blackboard Inc. announced it has entered into an agreement under which it will be acquired by an investor group led by affiliates of Providence Equity Partners in an all-cash transaction valued at approximately $1.64 billion, plus the assumption of approximately $130 million in debt.

Pursuant to the terms of the agreement, Blackboard’s stockholders will receive $45.00 in cash for each share of Blackboard common stock. The transaction represents a 21% premium over the closing price of $37.16 per share on April 18, the day before Blackboard publicly announced that it was evaluating strategic alternatives.

Providence is a private equity firm focused on media, communications, information services and education investments. The firm’s current education industry investments include Archipelago Learning, Ascend Learning, Catalpa, Edline, Education Management Corporation and Study Group.

The transaction is subject to approval of a majority of the outstanding shares of Blackboard common stock and other customary closing conditions and regulatory approvals. The transaction is anticipated to close during the fourth quarter of 2011.

Upon closing, Blackboard will become a privately held company, remain headquartered in Washington DC and continue to be led by its existing senior management team.

The transaction will be financed through a combination of equity and debt. Bank of America Merrill Lynch, Deutsche Bank and Morgan Stanley provided debt financing commitments.

Barclays Capital acted as financial adviser to the Board of Directors and provided a fairness opinion in connection with the transaction. Dewey & LeBoeuf LLP acted as legal advisor to the Board of Directors in connection with the transaction. Weil, Gotshal & Manges LLP served as legal counsel to Providence in connection with the transaction.

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