Advance, the media company giant that owns Condé Nast, Advance Local, Stage Entertainment, and several other major properties, announced it is acquiring Oakland, California-based Turnitin — which is a leading provider of education technology for academic integrity and writing solutions. Turnitin is currently owned by an investment entity affiliated with Insight Venture Partners, GIC and other co-investors.
Turnitin’s proprietary software essentially promotes student authenticity and instructor effectiveness. With machine learning and advanced artificial intelligence, Turnitin’s products are able to check for plagiarism in writing and code assignments. And it can automatically grade for teachers across multiple disciplines and provide feedback for students.
Currently, Turnitin’s products are used by more than 34 million students across 15,000 K-12 and higher education institutions in 153 countries. The company’s global reach and client network also include corporations, governments, and research institutions.
By crunching data from all of these institutions, Turnitin has been able to build an unparalleled database of content used to check for text similarity and verify authorship. In fact, Turnitin grew from one million student paper submissions in 2002 to one billion in 2018.
“We admire Chris Caren and his team, and Turnitin’s outstanding track record of enhancing integrity in written work at schools, universities, and publishers worldwide through cutting-edge technology,” said Advance co-president Steve Newhouse in a statement. “Advance is committed to investing in innovative technologies and we are thrilled to add Turnitin to our portfolio. We look forward to working with Chris to further enhance the company’s core products, invest in emerging technologies, and explore new opportunities.”
This acquisition represents Advance’s second significant acquisition under its multi-billion dollar capital deployment initiative after Stage Entertainment was acquired in late 2018. And this transaction has no financing condition and is subject to customary regulatory approvals. The deal is expected to close in the second quarter of 2019.
“Today marks an exciting chapter in Turnitin’s development, and we are excited to be joining the Advance family of companies,” added Turnitin CEO Chris Caren. “Advance’s long-term perspective and commitment to education make them the perfect partner to help Turnitin advance our mission of engaging students and teachers worldwide. We would like to thank Insight and GIC for their support over the past few years which enabled us to scale the platform and we look forward to taking the company to the next level with Advance.”
The financial terms of the transaction were undisclosed. However, The Wall Street Journal reported that the deal was valued at nearly $1.75 billion.
Turnitin’s parent company iParadigms was founded in 1998 by four university students. The founders had to bootstrap the company since they could not raise money. And so the company had to break even early and Turnitin has been cashflow positive since 2004, according to EdSurge.
“We are pleased to have supported Turnitin’s growth the past five years,” explained Insight managing director Deven Parekh. “It has been a pleasure to work with Chris and the management team and we are confident Advance will be a great steward going forward. We wish them all success for the future.”
iParadigms was acquired by private equity firm Warburg Pincus in 2008. And then GIC acquired it in 2014 for $752 million. And Turnitin made several of its own acquisitions including Ephorus (Europe-based plagiarism detection tool) and Lightside Labs (provides automated feedback on student writing) in 2014. In 2018, Turnitin also acquired VeriCite and Gradescope.
In terms of revenue, Turnitin generated over “$100 million but less than $200 million” last year. And that figure was growing at about 15% year-over-year for the past five years.
Turnitin was also being considered by 20 other investors for an acquisition. And many of those offers were within “a few percentage points” of Advance’s offer. The bidders included other media companies, private equity firms, and pension funds.
Advance has been shifting a lot of attention toward educational technology. For example, Advance led a $70 million round into tech skills training company General Assembly — which was acquired by Adecco Group for $412.5 million in 2018. And Advance is also an investor in online learning company Everfi.
Evercore and Paul, Weiss, Rifkind, Wharton & Garrison LLP was the advisor for Advance. And Turnitin, Insight, and GIC were advised by UBS and Goodwin Procter LLP.