Angel Learning acquired for $95 million-WEB ONLY

Blackboard Inc., a Washington, D.C.-based education-technology firm, has agreed to acquire Indianapolis-based software developer Angel Learning Inc. for about $95 million, the companies announced yesterday.

The transaction, composed of $80 million in cash and $15 million in stock, has been approved by both companies’ boards of directors and Angel Learning’s shareholders. It is expected to close this month.

Angel Learning’s roots date to 1996, when faculty members at IUPUI developed a courseware system that became OnCourseSM. In 2000, a company called CyberLearning Labs Inc. was launched to sell the software. CyberLearning Labs developed an e-learning software product called the Angel Learning Management Suite later that year and eventually changed the company’s name to match the product’s.

As investors, Indiana University and its Research and Technology Corp. stand to gain about $23 million in proceeds from the sale, the school said. As a start-up, the company was nurtured in IU’s Emerging Technologies Center in Indianapolis. Today, Angel Learning has about 200 programmers, analysts and marketing personnel. It is housed at Intech Park on Indianapolis’ northwest side.

“This is our greatest success to date in terms of a university start-up company,” said IU President Michael A. McRobbie in a prepared statement. “It is important to note that it was made possible in part by the strategic investments IU has made in information technology over the past decade.”

Michael Chasen, CEO of Blackboard, told the Chronicle of Higher Education yesterday that the combined company plans to continue to sell Angel Learning’s software as a separate product in the short term. Eventually, the best features of Angel will be folded into Blackboard’s software.

Chasen told the Washington Post that some staff cuts will be made where there are redundancies in the two companies, but no large layoffs are planned in the immediate future.

Angel LMS is used by more than 400 clients, including K-12 schools and school districts, community colleges, universities and private schools to create virtual learning environments for online learning.

Blackboard develops and licenses software applications and related services to more than 2,200 education institutions in more than 60 countries. It went public in 2004.

The company released its financial results for the first quarter yesterday and posted a loss of $37,000, compared with a loss of $4.4 million in the first quarter of 2008. Revenue was $86.4 million.