Analysis: Is Instructure’s Transaction Rigged? SEC’s Statements Show a Transparent Process

Mikel Amigot | IBL News, New York

When in mid-November the first activist investor put its eyes on Instructure/Canvas LMS, the edtech startup entered a phase of uncertainty.

It happens. When Wall Street smells serious money on a potential buyout, soulless executives emerge, trying to control the narrative.

No surprise that quiet workers at Canvas in Salt Lake City are still in shock.

Now, they see how their company is publically portrayed as a rigged machine, riddled with conflicts of interest, and setting a dishonest process to avoid superior offers.

On February 13, 2020, at the special meeting of stockholders in Salt Lake City, Utah, shareholders will vote on the proposed transaction with Thoma Bravo. At that moment we will discover what the play of many opposing shareholders is and what’s real vs. distracting smoke.

In the meantime, an attentive reading of the filings to the SEC can provide us with an immediate clue.

Indeed, the December 23, 210-pages proxy statement about the proposed acquisition is a gold mine. It allows anyone to understand what’s going on beyond the negative public messages towards Instructure’s management team.

Investors and analysts who said the process is unfair and obscure will find on pages 26 to 43 plenty of details showing that the Board ran a rigorous and transparent process, evaluating dozens of proposals. The transaction took into account the evolution of the industry and possible alternatives. There were 55 contacted parties; early 20 went under NDA. And Thoma Bravo’s $2 billion all-cash bid was superior in value.

The speculation that the deal is pierced with conflicts of interests and CEO Dan Goldsmith was hired to primarily sell the company and benefit Thoma Bravo doesn’t seem accurate. In fact, Goldsmith [in the picture above] wasn’t part of the transaction committee and did not have a role there, according to the proxy. The statement also shows that he regularly talked to many bidders over the course of many months, reporting such interests to the Board.

Inevitably, the CEO of an NYSE or Nasdaq traded company is always under suspicion when high compensations are on the table. However, in this case, the decision to proceed with the transaction with Thoma Bravo came unanimously from the Board.

Dealing with the SEC is no joke and Instructure reflects on their documents (pages 27, 42-46) that to avoid the appearance of impropriety, on multiple occasions Dan Goldsmith left the room, being excused from the Board’s deliberations or debates where conflicts existed. The Company’s secretary kept track of inbound logs to ensure that the process was overseen by the board.

In the end, the market dictates the price and the SEC regulates and protects investors.

We will see soon if Instructure is finally taken private and whether Thoma Bravo decides to grow the company or break it into multiple pieces, extracting value from the Bridge corporate platform, the leading position of Canvas and especially the hidden wealth of users’ data.

The reality detailed by the SEC filings doesn’t show any deceptive or misleading tactics played by Instructure Inc.

It looks like that some high-profile investors do not accept the price of $47.60 in cash per share.  They might believe that winning the public perception battle enhances their negotiating position to obtain a higher price. Raises $16 Million in Funding to Expand Its Cinema-Quality Video Courses

IBL News | New York, the online course provider created by a MasterClass co-founder, this week raised $11.7 million in a Series A round led by GSV Ventures with the participation of Harrison Metal, Tectonic Capital, and Jackson Square Ventures. To date, the New York-based startup has raised $16 million.

According to the company, the funding follows a successful pilot program with the University of Pittsburgh, where students had achieved a grade of C or better at the same rate as those students in comparable courses set in the traditional classroom setting.

Founded in 2018, currently offers two, 14-week-long online courses on calculus and psychology, priced at $400. [See the trailers announcing the two courses, below]

Its approach is based on “producing cinema-quality lectures taught by charismatic professors in academia, including Yale, MIT, Columbia, Cornell, and Davidson”, along with access to 1-on-1 tutoring and AI-proctored assessments, among other distinctive methods.



IBL News, August 18, 2019Startup Partners With the University of Pittsburgh to Offer Transfer Credit for Online Classes

Instructure Moves Forward with Thoma Bravo’s $2 Billion Acquisition Proposal

IBL News | New York

Instructure Inc (NYSE: INST) announced today that it did not receive any superior alternative offers for the purchase of the company during the 35-day “Go-Shop” period, which expired yesterday.

In consequence, the Thoma Bravo’s 2 billion all-cash acquisition proposal is, as scheduled, the winning one.

Instructure and JP Morgan met in all with 24 potential buyers total, during this period, and a total of 55 parties over the past year.

On February 13, 2020, at the special meeting of stockholders in Salt Lake City, Utah, shareholders will vote on the proposed transaction with Thoma Bravo.

The Instructure’s Board has strongly suggested an approval, believing that Thoma Bravo’s proposal “provides significant, compelling, and certain value to all shareholders.”

The most notorious opposing shareholders are four: Lateef Investment Management LP (with 1.5% of Instructure’s shares), Praesidium Investment Management (7.5%), Rivulet Capital (5%) and Obendorf Enterprises (6%).

However, they still do not sum up the majority.

The transaction with Thoma Bravo is expected to close in the first quarter.

edX Launches Its First Two MicroBachelors Degrees with WGU and NYU

Mikel Amigot | IBL News, New York announced today the launch of the so-called MicroBachelors Programs, intended to adult Americans who cannot afford a traditional Bachelor’s degree and cannot take the time away from work to pursue one.

These fully online programs consist of three to five courses, without admission requirements or application, and are priced between $500 and $1,500 (roughly $166 per credit).

Once learners complete the full program and pass, they will earn a MicroBachelors program credential from the university offering the program. This stackable credential can be applied toward a full bachelor’s degree.

The first two MicroBachelors are IT Career Framework, from Western Governors University (WGU), and Computer Science Fundamentals, from NYU. A third one, Professional Writing, from Arizona State University (ASU) is forthcoming.

The Information Technology Career Framework is a 6-month program with three courses, is recognized for credit by WGU and costs $1,347.

The NYU’s Computer Science Fundamentals is a 6-month program with three courses and costs $500. However, this program is pending recognition for credit by Thomas Edison State University (TESU).

In the whole MicroBachelors program, learners will be able to apply credits from one of edX’s university credit partners toward a full Bachelor’s degree.

“This is the first credit-backed stackable credential, marking a significant milestone in online learning,” Anant Agarwal, co-CEO at edX wrote in a blog post.

“These programs are a significant step towards making a key academic milestone — the Bachelor’s degree — accessible and doing so in a way that positively impacts the members of our workforce most at risk to be displaced by automation and other changes in the workplace,” he added.

In addition to WGU, NYU, ASU, TESU, edX is collaborating in its MicroBachelor program with organizations such as SunTrust Foundation (now Truist Foundation) and

In this regard, the Truist Foundation announced today that it has awarded a $1 million grant to edX to support the initiative.

“Our participation in the edX MicroBachelors Program Skills Advisory Council, a group bringing together the key stakeholders in this arena, is a fundamental part of creating these conversations,”  said Lynette Bell, President of the Truist Foundation.

edX plans to continue adding more MicroBachelor programs and new credit pathways that stack into full degree options with other university partners in the future.



Esri’s Free MOOC Program, with 150,000 Students, Sets a Reference in Corporate Education at Scale

Mikel Amigot | IBL News, Milwaukee

Esri, the Redlands, California-based company that manages the GIS mapping software, has been quietly developing a successful and free MOOC program, setting a reference in the corporate world for digital education at scale.

Esri’s MOOCs, now part of the Top 100 Free Online Courses list provided by Class Central, has attracted over 150,000 enrollments worldwide, as mentioned in an interview with IBL News. [Watch the interview below].

The most successful open course has been “Cartography”, with 80,000 learners.

So far, they have developed five MOOCs, ranging between 4-6 weeks long, and include certificates of completion, free of charge.

A sixth course, titled Spatial Data Science, is currently in the works. Esri’s passionate subject matter experts teach those online classes.

The completion rate numbers on these courses are as equally impressive, varying between 25% to 30%. “Our students must be more motivated than others,” Adena Schutzberg, MOOC Program Manager at Esri, explained.

Esri’s MOOC program was started by David DeBiase, a GIS instructor and manager within the company. His idea was based on expanding teaching while driving marketing opportunities.

In addition to MOOCs, Esri offers a hundred short classes intended to keep up with the fast-paced developments in geospatial technology. The corporation uses its own home-made LMS.

To promote active learning and engagement in courses, the MOOC instruction team nudged students toward active, independent and social learning.

“Our tough-love approach guided students to practice a skill needed for future success and provided the instruction team members with a new perspective on their roles in teaching and learning,” stated Adena Schutzberg.

She keynoted the last IEEE Learning with MOOCs conference, which took place in October 23-25 in Milwaukee, WI.

Her talk titled “Using Tough Love to Promote Active Learning” was exclusively recorded by IBL. [Watch it below]



The CEO of Instructure May Reap Over $22M After the Sale of the Company

IBL News | New York

Five top executives at Instructure Inc (NYSE: INST), a top learning company about to be acquired by equity firm Thoma Bravo, may receive a “golden parachute compensation” of over $25 million, following a “change in control” of the company, according to a statement filed to the SEC on January the 2nd.

The CEO Daniel T. Goldsmith (Dan Goldsmith) would obtain over $22 million ($473K in cash, $22M in equity and $20K in perquisites/benefits), assuming the Instructure’s transaction occurs on February 13, 2020.

The second-largest compensation would be for the CFO Steven B. Kaminsky, a total of $9.4 million. Matthew A. Kaminer, Senior Vice President and General Counsel, would reap $8.6 million; Marta DeBellis, Chief Marketing Officer, $3.3 million; and Frank Maylett, EVP Sales at Instructure, $1.08.

These payments are automatically activated upon “Termination At” or following “Change in Control”, as those executives are entitled to additional compensation or benefits. The amounts, shown in the table below, do not include the payments or benefits that would have been earned with equity awards –including cast bonuses for 2018– prior to the $2 billion all-cash sale to Thoma Bravo –which all the Board urged shareholders on December to approve.

The company’s filings to the SEC assumes that the merger with Thoma Bravo will occur on February 13, 2020.

Another Investor Opposes to Thoma Bravo’s Takeover

On the other hand, a fourth shareholder of Instructure, Lateef Investment Management LP, came out against the takeover by Thoma Bravo, arguing the education software company is selling for cheap after running a flawed sale process, Bloomberg reported.

Lateef Investment Management LP, which owns roughly 1.5% of Instructure, highlighted that the company is worth at least $60 per share.

Quoc Tran, Chief Investment Officer at Lateef Investment Management LP, stated, “Goldsmith staying on as CEO seems like a conflict of interest where he’s putting his own interests ahead of shareholders.“We don’t think Dan has done a good job with Bridge and this deal rewards him rather than hold him accountable.”

Responding to criticism from other three top shareholders – Praesidium Investment Management (7.5%), Rivulet Capital (5%) and Obendorf Enterprises (6%) –, Instructure said two weeks ago that equity firm Thoma Bravo offered the highest price, $2 billion on a $47.60 per share deal.

The firm added that its review process lasted 11 months with 19 parties signing non-disclosure agreements.

The deal has a so-called go-shop period in which it can solicit other offers until tomorrow Wednesday.



Related story:
Bloomberg, Dec 31: Instructure Set Up $25 Million Stock Payoff for Bosses Amid Sale

Federal Students Loan Portfolio Tops $1.51 Trillion After a 5% Increase

IBL News | New York

Today, the outstanding federal student loan portfolio is $1.51 trillion, according to data released by the Education Department on Friday.

The Direct Loan (DL) portfolio now represents 82 percent of the total, while the Federal Family Education Loan (FFEL) portfolio represents 17 percent, and Federal Perkins Loan Program loans comprise less than 0.5 percent.

Year-over-year, the total federal loan portfolio has increased 4.9 percent—about $71 billion—with the FFEL portfolio decreasing by more than seven percent and the DL portfolio increasing by eight percent.

Through September 30, 2019, approximately 16.1 million applications were submitted for the 2019-2020 application cycle, a 3.1 percent decrease from the same time period in the prior year.

During FY2019 Q4, the percentage of new defaulters slightly increased compared to the same time last year while the percentage of dollars entering default remained on par with last year. Approximately 260,000 DL borrowers—or 1.4 percent of recipients who were in repayment last quarter—with outstanding balances totaling $6.3 billion—or 0.9 percent of the total outstanding dollars that were in repayment last quarter— entered default.

DL delinquency rates have resumed their downward trend following an uptick over the last few quarters as a result of disaster-impacted borrowers exiting forbearance statuses. In fact, more than 83 percent of non-defaulted DL recipients with loans in active repayment are current on their loans (i.e. on time or less than 31 days delinquent), putting the 31-day plus delinquency rate at 16.7 percent by recipient count and 13.2 percent by total dollar balance, representing year-over-over decreases of 10.9 and 10.5 percent, respectively.

The LearnLauch Conference this Month in Boston Expects 1,500 Educators and Investors

IBL News | New York

One of the first education events in the calendar of this year will be the LearnLaunch Across Boundaries Conference, scheduled in Boston from January 30-31. Education innovators from across the country and the world will gather in this 8th edition, where over 1,500 educators, entrepreneurs, and investors are expected.

This year the conference features a new President and Executive Director, Jane Swift, the former Massachusetts Governor, who joined the organization on July 1. She will be hosting a Future of Work showcase together with the University of Massachusetts President Marty Meehan and Rosalin Acosta, the Massachusetts Secretary of Labor and Workforce Development, on day two of the conference.

At Across Boundaries, thought leaders will examine this year’s issues such as Artificial Intelligence, workforce development, technology, gaming and financial assistance during the conference, which its focus is on “Creating the Future of Learning.”

On Thursday, January 30, a keynote panel comprised of Michael Hansen—the CEO of Cengage, Frank Britt—the CEO of Penn Foster, and Jamie Candee—the CEO of Edmentum, will explore the influence of technology on learning and the future workforce. The conversation will be moderated by John J-H Kim of Harvard Business School.

Other highlights for Day 1 include keynote speeches by Dr. Parminder K. Jasaal of the Institute for the Future, and Scott Pulsipher of Western Governors University. Jassal will bring the audience through an interactive exercise in the year 2030 as they explore how the intersection of work and learning will impact the innovation of education.

On Friday, January 31, Kaya Henderson of Teach for All, will discuss access to education, along with the lessons we are learning from Washington, D.C.  Tom Vander Ark, the CEO of Getting Smart, and a leading strategist in U.S. education, will lead the final keynote, hosted by Jean Eddy of the American Student Assistance.



IBL News Releases the 2020 Conference Calendar

IBL News | New York

As we start a new year and decade, it is time to check, or re-check, what are the main conferences for education, edtech and learning at scale for the upcoming months in the U.S. and abroad.

There are plenty of events, and at IBL News, we have selected many of them. Our editorial team likes to organize them by month, indicating first the date and location.

IBL’s goal is to provide and maintain the most complete and up to date calendar available within the industry. We are constantly adding new events (so don’t forget to check regularly). However, if we missed any, please let us know.

As of today, the conference calendar is as follows:

Our journalistic team also maintains a calendar of conferences taking place in Latin America and Spain, through our Spanish news site.

First Online MBA on edX: “If We Don’t Do it, Someone Else Will,” Says Boston University

IBL News | New York

Beginning in fall 2020, Boston University (BU) and its Questrom School of Business will offer a low-cost online MBA worldwide on – a platform created in 2012 by Harvard University and MIT, now with more than 21 million registered users. Its tuition will be $24,000.

The university sees this MBA – the first one offered through edX – as an opportunity for growth, and to be a disruptor, in a changing landscape.

“With the online MBA, we’re seizing the initiative to offer a major degree for which we believe there is global demand. Higher education must evolve in a fast-changing world. We aim to lead in this evolution,” President Robert A. Brown said in Boston Today.

In launching the online MBA, the university is investing in the potential to deliver high-quality online graduate programs with the capability for large-enrollment rates, which could be key in the near future, said Jean Morrison, BU Provost and Chief Academic Officer.

“Through this degree, BU opens itself to the world in a manner we haven’t done before,” stated Chrysanthos Dellarocas, Associate Provost for Digital Learning & Innovation.

“This is a paradigm shift on so many levels,” adds Susan Fournier, Allen Questrom Professor and Dean of the Questrom School of Business.

“The way to think about it is, if we don’t do it, someone else will. We might as well be the ones that lead the pack,” added Dellarocas.

Because of the affordability of the program, BU will not offer scholarships to online students, although scholarships are available from a variety of external sources. Federal financial aid will be available to enrolled Questrom Online MBA students, as well.

Regarding instructional challenges, Chrysanthos Dellarocas, who is also the Richard C. Shipley Professor in Management, noted that “it will drive us to get really clever in exploring how far we can take peer engagement and how creatively we can combine technology and human instructors.”

There are 300 full-time and 600 to 700 part-time students in the on-campus MBA program and 50 to 60 in the executive MBA program.


edX Partnership

BU has already been in partnership with edX for six years, offering a number of free or low-cost MOOCs, and in the last couple of years two MicroMasters in business, where students take five courses and earn a certificate.

“I think this is exciting, having an online MBA from a top school that can be made available to the whole world on edX. I think it’s a big deal,” said Anant Agarwal, edX co-CEO on BT Today. “It is one of the highest-demanded programs on edX.”

Last fall edX offered its first 10 master’s degree programs, including a master’s in analytics from the Georgia Institute of Technology, with currently 3,000 learners enrolled.

Additionally, edX offers more than 2,000 MOOCs from 140 schools, usually available free, as well as 53 MicroMasters and 94 professional certificate programs.

About two-thirds of edX’s learners already have bachelor’s degrees and are typically looking for employment or to advance within their jobs.

BU TodayQuestrom to Offer Online MBA with edX in 2020

We have developed a 100% remote video production solution to help you through this challenging timeLearn More
+ +