Blackboard Inc. announced this afternoon that it plans to buy Angel Learning, a rival course-management software company, for $80-million in cash and $15-million in stock, adding to the company’s many acquisitions over the last several years.
Both companies have approved the deal, and Blackboard expects the arrangement to become final by the end of May.
Michael L. Chasen, president and chief executive of Blackboard, said in an interview with The Chronicle, that in the short run the combined company plans to continue to sell Angel Learning’s software as a separate product, so the 400 colleges and elementary and secondary schools that use it can continue to do so for now. Down the road, the best features of Angel will be folded into Blackboard software, Mr. Chasen said. “There are a number of great features and functionalities from Angel that we would like to incorporate into our long-term product strategy,” he said. He added that Angel is popular with community colleges, a market segment that Blackboard is excited to do more business with.
In 2005, Blackboard bought an even bigger competitor, WebCT, for $180-million. And in 2002 Blackboard bought another competing course-management system, called Prometheus, from George Washington University. Last year Blackboard diversified its product line by acquiring the NTI Group, which sells emergency-notification software.
In an interview just a few months ago, Mr. Chasen told The Chronicle that he felt the company had only just recovered from the difficult process of bringing together features from the WebCT and Blackboard products into a common framework. Some customers had complained that the merger was a sometimes rocky road, bringing spotty customer support and confusion over the different product lines.
Mr. Chasen said this week that Blackboard learned many lessons from its purchase of WebCT, and that it expects this latest acquisition to be much smoother as a result.
Ray Henderson, chief products officer for Angel Learning, said in an interview that his company’s biggest concern in its early talks with Blackboard officials was whether Blackboard was committed to offering high levels of customer support for Angel’s software. “We have been offered reassurances there,” Mr. Henderson said.
The deal will mean a windfall for Indiana University-Purdue University Indianapolis, where the Angel software was first developed. In July 2000, the university spun off a company called CyberLearning Labs to sell the software to other institutions. Later the company changed its name to Angel Learning, but the university remains the largest shareholder. —Jeffrey R. Young
Update: Reaction on several education blogs and on Twitter has been critical of the deal, with some Angel customers complaining that they chose the company because it was an alternative to Blackboard. One Twitter user joked that the new combined company should be called “Dark Angel.”
Trace A. Urdan, an education-industry analyst with Signal Hill, an investment firm, said that Angel had recently been winning clients away from Blackboard. “The buzz had been that Angle had been really doing well — taking customers away and firing on all cylinders,” he said. “I think that Angel was percieved to have build something of a better mousetrap.”
Mr. Urdan said that the often compares Blackboard to Microsoft. “They may not have the best software, but they are very adept business people,” he said. “This is a very smart business move — though it may not result in the absolute best product development path.”
Angel customers will be given a chance to voice their concerns and questions next week during the company’s previously-planned annual user meeting, where Blackboard officials will take the stage with Angel executives. “We know we’re going to have hard questions there,” said Mr. Henderson, of Angel. “All of our clients will be given the chance for open mic.”