Activist investor revealed a stake in the cloud-based company in April

Praesidium Investment Management is the latest firm to push for a sale of education software firm Instructure. The activist hedge fund has reportedly found “dozens” of private equity or other strategic buyers.

Instructure’s learning management platform Canvas continues to generate interest among buyers. According to Bloomberg, Canvas could carry a market value of up to $2.5 billion. As of April, more than 3,000 universities, school systems, and institutions use the technology. Canvas allows schools, professors, and administrators to manage course schedules, input grades, and store student records.

“It’s extremely valuable and potentially very profitable,” Praesideium’s co-founder Kevan Oram told Bloomberg.

Is Bridge the Sticking Point?

Oram says that Instructure’s employee development business Bridge is losing money. He suggests that firms would be interested in that business or the entire Instructure company. However, he suggests that selling Bridge for its technology – despite its steep losses – could unlock a lot of value.  Oram told Bloomberg that Bridge generates $25 million in revenue but loses roughly $60 million.

Who is Joining Activist Praesidium Investment Management?

Sachem Head Capital Management, another activist firm, has increased its stake in Instructure and pushed for a sale as well. Bloomberg said that Instructure has already begun a strategic review of its assets.

During its recent conference call, it said it would provide updates on a possible split of the company on December 3. That date coincides with its investor day.

Finally, Praesidium Investment Management announced a 5% stake in the firm back in April 2019. Oram further discussed the investment at 13D Monitor’s 2019 Active-Passive Investor Summit in New York.

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