Instructure to acquire Arizona-based Parchment in $835 million deal

Instructure Holdings Inc., a Salt Lake City learning software company and maker of the Canvas platform, has signed a definitive agreement to acquire Parchment, an Arizona-based cloud platform that provides services such as digital credential management and document integration for the education industry.

Parchment has more than 15,000 customers and has exchanged more than 165 million credentials over two decades. With this transaction, Instructure said it will add the world’s largest academic credentialing platform and network to the Instructure Learning Platform. The acquisition is expected to significantly expand Instructure’s existing customer base, the company said.

“This acquisition represents an important next step for Instructure to serve all learners, beginning in K-12 and continuing throughout their lifelong learning journey,” said Steve Daly, CEO of Instructure. “By adding Parchment to the Instructure Learning Platform, we will provide a verifiable and comprehensive digital passport of achievement records and outcomes for learners. Together we expand the Instructure platform for existing customers, welcome new Parchment customers and open new pathways for growth with multiple new solution categories.”

The transaction is valued at approximately $835 million. Including a tax benefit resulting from the transaction, the net purchase price is approximately $795 million, or approximately 16 times Parchment’s expected 2024 adjusted EBITDA. Parchment is expected to contribute approximately $115 million of revenue in 2024, Instructure said.

Instructure plans to finance the transaction with cash on hand and incremental debt under its existing credit facilities. The transaction is expected to close in the first quarter of 2024, subject to regulatory approval and customary closing conditions.

Canvas serves thousands of institutions worldwide to support the learning experience of their students in degree and non-degree programs. With the acquisition of Parchment, Instructure expands its institutional relationships, broadens its platform footprint and opens an estimated $2 billion in total addressable market across a number of high-growth categories only serviceable through the combination of the two providers.

Parchment’s Award and Digitary platforms allow schools and universities to securely issue transcripts, diplomas, certificates, verifications, comprehensive learner records and other credential formats digitally. Parchment’s Pathways platform reduces the friction in student mobility. For secondary students enrolling concurrently in college, college students enrolling across institutions and any learner seeking credit for learning they have done throughout their educational journey, Parchment makes the transition and transfer seamless.

“We’re thrilled to join Instructure, the world’s leading learning platform that’s dedicated to amplifying the power of teaching and learning,” said Matthew Pittinsky, CEO of Parchment. “Parchment’s mission is to help turn credentials into opportunities. With this combination, we will dramatically expand the credential to include rich data and more evidence of skills and learning. The seamless experience we envision for learners will provide easier, more equitable access to the educational and employment opportunities they seek as they build their lifelong record of learning.”