UPDATE 2-Renaissance accepts improved Permira bid, snubs Plato Learning

Tue Sep 27, 2011 10:53am EDT

* Deal valued at about $455 mln

* Offer price of $15.50/share on average

* Permira offers public stockholders $16.60/share

* Renaissance founders, family to get $15/share

* Shares touch a high of $16.65 (Rewrites throughout with analysts comments, share movement)

By Fareha Khan

Sept 27 (Reuters) - Education software maker Renaissance Learning Inc said it would be bought by Permira Funds for about $455 million in cash, after the private equity firm sweetened its offer to match a rival takeover bid from Plato Learning.

An affiliate of Permira funds has offered stockholders other than Renaissance co-founders Terrance and Judith Paul, and members of their family, $16.60 a share -- 6 percent more than the stock's closing price of $15.69 on Monday on Nasdaq.

The company's shares jumped 6 percent to touch their 16-month high on Tuesday morning.

There has been growing private equity interest in the U.S. K-12 education sector. In July, Providence Equity Partners, a well-known investor in the education field, agreed to buy education software company Blackboard Inc for $1.64 billion.

Terrance and Judith Paul, who founded Renaissance in 1986, and members of their family own about 69 percent of the company's outstanding shares and have backed Permira's improved offer.

They will receive $15 a share in cash for their shares. On average, Permira Funds will buy Renaissance shares for $15.50 each, matching a Plato Learning's buyout offer.

"It illustrates the influence that the founders Terrance and Judith Paul have on the company and this process of selling it, because they are willing to accept a lower value from Permira and allow public shareholders to get a higher value," Stifel Nicolaus analyst Jerry Herman told Reuters.

"They (Pauls) are willing to take lesser money to sell the company to who they want it to be sold to, as opposed to just an outright bidding process," Herman said.

In August, Wisconsin-based Renaissance had first struck a deal to be bought by Permira Funds for $14.85 per share in cash , but this was in jeopardy when Plato Learning stepped in with a higher offer earlier this month.

Learning-software company Plato, too, was taken private by Thoma Bravo last year.

Europe-based Permira, which was founded in 1985 and advises funds with a total committed capital of about 20 billion euros, has investments in companies such as Freescale Semiconductor and fashion label Hugo Boss BOSG_p.DE. (Reporting by Fareha Khan in Bangalore; Editing by Viraj Nair)

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