Feb ’19, we reported that privately-held Smart Choice had hired Eide Bailly for a potential sale, a relationship that might have been leveraged to gain introduction, identified the current owners/founders and that the company could be a strategic acquisition for a PE group in the edtech space or for a competitor. The CEO confirmed the company had grown 20-30% in ’18. In Nov. ‘19, SchoolMint announced that it had completed the acquisition.
Smart Choice Technologies, a privately held educational enrollment software and digital marketing technology company, has hired boutique advisory firm Eide Bailly for a potential sale process, said Mike Spears, president and CEO.
The Lafayette, Louisiana-based company began working with the advisor about nine months ago, and has fielded several offers, but is still engaging with suitors, Spears added. He declined to disclose revenue but said that Smart Choice grew 20% to 30% last year and expects to grow at a faster pace this year based on a very healthy pipeline.
Formerly known as Firefly Digital, the company was founded in 1998. Spears and his two business partners, Casey Bienvenu and William Dalton, each own one-third of Smart Choice, said Spears. It is interested in selling because “we don’t have the resources to grow and innovate as fast as we’d like,” he added.
“We’d like to connect with PE groups doing roll-ups in the edtech space,” he continued. For such players, Smart Choice would be “a strategic acquisition in a niche of the market.”
He added that competitors such as Powerschool and SchoolMint could be a good fit as strategic acquirers. PowerSchool, a California-based provider of K-12 education software, merged with PeopleAdmin, a Texas-based provider of education staff software, in April 2018. Onex acquired a stake in the combined entity for undisclosed terms. PowerSchool acquired InfoSnap, a provider of cloud-based Online Registration Management and School Choice/Lottery solutions for K-12 public, private and charter schools, in November 2015. SchoolMint is actively seeking acquisitions, according to a recent report by this news service.
Spears said he has had conversations with and maintains a relationship with Frontline Education but is not sure if the company is interested in getting into student administration. He pointed out that Frontline has been involved in advocacy for school choice. Frontline was acquired by Thoma Bravo for undisclosed terms in August 2017.
Firefly developed custom web-based applications, including a content management system. One of those custom products evolved into Smart Choice Technologies, a K-12 enrollment software-as-a-service based platform. It ended up becoming the company’s flagship product and now accounts for four times as much revenue as the digital marketing segment, Spears explained.
Smart Choice was originally developed for the Lafayette Parish School System in 2012. It enabled parents to enroll their children in career-oriented magnet schools. Bienvenu, Firefly’s strategic partner on the project, managed the technology and Firefly developed the infrastructure to market, license and support the system. In March 2018, “we merged,” Spears said, and the company is now known as Smart Choice.
The three partners would like to continue working in the field after a sale. “We love what we’re doing. We’d rather stay on and help develop a platform roll-up strategy,” Spears said.
Smart Choice has a lottery algorithm that complies with K-12 enrollment systems around the country. It also allows for centralized enrollment among both public and private schools, and ensures that no seats are left open in a given school. The platform is used in seven of the top 30 K-12 school districts in the country and 20 of the top 125, he said. It covers more than 4.5m students in more than 6,500 schools in 300 cities across 26 states.
It has about 30 employees.