Exclusive: TPG close to $3.5 billion deal to buy Ellucian - sources

(Reuters) - Buyout firm TPG Capital LP is in advanced talks to acquire Ellucian Company LP, in a deal that could value the U.S. provider of software to universities and colleges at $3.5 billion, including debt, people familiar with the matter said.

Ellucian’s owners, private equity firms Hellman & Friedman LLC and JMI Equity, are in the final stages of negotiating the deal with TPG after running an auction for the company, the people said on Wednesday, cautioning that the talks could still fall through. If the negotiations are successful, a deal could be announced later this month, the people added.

The sources asked not to be identified because the sale process is confidential. TPG and Hellman & Friedman declined to comment, while Ellucian and JMI Equity did not immediately respond to requests for comment.

The potential deal comes as private equity firms seek to take advantage of the high valuations assigned to companies benefiting from demand for digital offerings and platforms in the education sector.

Blackboard Inc, a U.S. software company owned by Providence Equity Partners LLC that offers learning tools for high school and university classrooms, is also exploring a sale that could value it at as much as $3 billion, including debt, sources told Reuters in late July.

Fairfax, Virginia-based Ellucian provides software to more than 2,400 higher education institutions in 40 countries that is used for student registration, finance, human resources, recruiting and other administrative purposes.

Hellman & Friedman and JMI Equity acquired the company in 2009, then known as Datatel, for $570 million. Datatel acquired higher educations assets from SunGard in 2012 for $1.8 billion and renamed itself Ellucian that year.

Last year, Hellman & Friedman acquired K-12 education company Renaissance Learning for $1.1 billion, and Charterhouse Capital Partners acquired Skillsoft, which provides educational software to businesses, for more than $2 billion.

Other deals in this space include Hellman & Friedman’s acquisition of K-12 education company Renaissance Learning for $1.1 billion last year, and Charterhouse Capital Partners’ acquisition of Skillsoft, which provides educational software to businesses, for more than $2 billion, also last year.

Reporting by Liana B. Baker and Greg Roumeliotis in New York; Editing by Steve Orlofsky