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Reverence Capital buys Blackboard Transact

Blackboard Transact division acquired by Reverence Capital Partners

On March 7, 2019, Blackboard announced the sale of its Blackboard Transact unit to private equity firm, Reverence Capital Partners.

The deal with Reverence sees Blackboard spinout and sell the Transact business line including the CASHNet payment solution.

“From a high level, our leadership team remains firmly intact, but with support from Reverence we’re better positioned – more laser focused – to serve our clients,” says David Marr, CEO of Transact. “Everything from a management and product standpoint remains intact.”

“What I like about Reverence is their background in financials, banking and transactions,” Marr adds. “We process over $40 billion in transactions annually, so having a firm that understands these technologies and how to facilitate the full range of transactions is vital.”

A technology-oriented stance also helped to convince Blackboard of Reverence’s ability to drive the company forward.

“Reverence believes in what we’re doing and were blown away by our Mobile Credential and the roadmap we have in place going forward,” says Marr. “They’ve been supportive of that vision. They did a lot of research, and their desire to understand our community was evident from the start.”

“We also like their philosophy around innovation and how to execute innovation,” Marr adds. “There are many great private equity firms out there, but Reverence had the right combination of understanding and vision for our business.”

According to its website, Reverence Capital Partners is “a private investment firm focused on thematic investing in leading global, middle-market financial services businesses through control and influence oriented investments.” They describe themselves as “financial services specialists that bring decades of collective experience, advising and investing across all sectors of financial services.”

The firm was founded in 2013 by former Goldman Sachs execs, among others, and currently has investments in Kabbage, Victory Capital, CardWorks, Russell Investments, Venerable and Diamond Resorts.

A bit of Transact history

In 2000, Blackboard was a rapidly growing company that provided online learning solutions. The company officially entered the campus card system market with the acquisition of two longtime industry players, CampusWide Access Solutions and CEI Special Teams.

In June 2011, the private equity firm Providence Equity Partners announced a $1.64 billion acquisition of Blackboard.

Transact later acquired CASHNet from Higher One Holdings in 2016 for a reported $260 million, adding a significant new business line and large number of clients to the Transact organization.

Owned by a private equity firm, the potential for a sale has always existed. Not surprisingly, news of a potential sale of the entire company has floated around for years, including a Reuters report of a $3 billion potential transaction back in July 2015.

Other rumors have long suggested that the campus card and payment portion of the business, Blackboard Transact, would be split out from the larger company and sold. Most recently, a Feb. 12, 2019 article on Bloomberg stated that Providence was fielding takeover offers that could be valued at $720 million for Transact.

In the end, the latter occurred, and Providence opted to split off and sell the Transact division.

“Our growth is a product of the trust of clients in the community,” says Marr. “We have grown to now north of 1,300 very important campus relationships.”

“What we are most exuberant about is the opportunity to go faster for our clients and elevate our service levels,” says Marr. “Now standing alone, we’re able to make our decisions in a way that is far more timely and effective for our clients and the students they serve.”

“At the end of the day this allows us to more effectively focus our investment and innovation, specific to the Transact business line and to better support our clients,” says Marr. “That’s what we’re going to be able to do going forward, and that will certainly make a difference for our community.”

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