Follett Corp. has sold its K-12 software and content division, Follett School Solutions (FSS), to the investment firm Francisco Partners. FSS, based in McHenry, Ill., provides software and print and digital content products to K-12 schools; those products include Follett Destiny, a library management system, which has installations in more than 75,000 K-12 schools worldwide.
Britten Follett, who heads the division for the family-run company, acknowledged that the sale was an emotional one, but said it was in the best long-term interest of FSS. She said that Follett Corp. realized that if FSS is to take advantage of the new opportunities in educational technology, it needed to make more investments.
“It reached a point where we determined we needed a new investment partner,” she said. “We explored a number of options and found Francisco Partners to be the best fit. They know the educational space and that is something that gave comfort to the family.”
Francisco owns a number of education-related businesses, including Renaissance Learning, Discovery Education, and myON. Earlier this year, it acquired Vital Source from Ingram Content Group. The new owners have named Britten Follett CEO of FSS Content, while Paul Ilse, most recently CEO of Discovery Education, has been appointed CEO of FSS Software. Both will report to Francisco’s board.
Ilse said that the decision to divide the responsibilities of FSS was made “to create focus. It is a very complex company,” he added. Follett and Ilse stressed that the two divisions will work together going forward to find ways to expand: “A rising tide raises all boats,” Ilse said.
Ilse noted that Francisco’s operating model is to look for organic growth and to consider complementary acquisitions. He said that he will spend the next few months getting to learn more about the company and its employees in an effort to find ways to develop new products for the K-12 market.
Follett made similar comments, saying she will be focused on telling customers and employees what the sale to Francisco means for FSS. She said that, while FSS has been a successful company, it is time to shift the mindset of employees and to transition the business.
Follett added that Covid-19 did not have a direct bearing on looking for a sale. After a couple of bad months early last year, business has rebounded, she said. But like in other areas, the pandemic did accelerate certain trends, with sales of e-books and other digital products, including Destiny, rising. To take advantage of those trends, as well as the promise of more federal government funding for schools, new investments were required, she said. Without a deal, she added, “we had limited amount of capital to spend.”
FSS will continue to operate from its headquarters in McHenry, and all K-12 employees will move to Francisco. The sale does not include Follett Higher Education Group or Baker & Taylor.