Blackboard to Acquire ANGEL Learning, Inc.

Combined Company to Accelerate Innovation, Interoperability in e-Learning WASHINGTON, May 8 -- Blackboard Inc. (Nasdaq: BBBB), a global leader in education technology announced this week a definitive agreement to acquire privately-held ANGEL Learning, Inc., a leading developer of e-learning software to the U.S. education industry. The acquisition combines ANGEL's record of innovation and client service with Blackboard's own innovation, financial strength and industry leadership to create a stronger, more flexible supporter of teaching, learning and student engagement. The combined company aims to accelerate the pace of innovation and interoperability in e-learning, and will continue to invest in solutions to more effectively support teachers and learners.

The acquisition will also enable Blackboard to incorporate ANGEL's client-first culture that has translated into consistently excellent experiences and high retention of ANGEL Learning clients. Under the terms of the agreement, Blackboard will acquire ANGEL Learning for approximately $95 million, net of cash acquired and excluding transaction costs. Both companies' boards of directors as well as ANGEL Learning's shareholders have approved the transaction and closing is expected in May 2009. "Blackboard is committed to bringing together the best ideas, innovations and practices in e-learning today," said Michael Chasen, Blackboard's President and Chief Executive Officer. "With ANGEL Learning, we bring on board a premier education technology company with a tremendous reputation for innovation and e-learning leadership. Independently we've each led the way in many areas of the industry. Now we can put the strengths of Blackboard and ANGEL together for the benefit of students in our effort to create a more flexible and engaging teaching and learning platform." "Now as part of Blackboard, we're confident that we can together help the combined client community advance e-learning and student achievement," said Christopher Clapp, ANGEL Learning President and Chief Executive Officer. "Together we can leverage our respective strengths to improve teaching and learning worldwide." Headquartered in Indianapolis, Indiana, ANGEL Learning provides enterprise e-learning software to over 400 clients. The ANGEL product portfolio includes the ANGEL Learning Management System, ANGEL ePortfolio as well as ANGEL Managed Hosting. Additionally, ANGEL also provides consulting and training services. A Combined Focus on Teaching and Learning Blackboard's acquisition of ANGEL Learning will introduce a range of benefits to institutions and the e-learning community, including: - A combined global community of practice of more than 5,800 K-12 schools, colleges and universities, government organizations and corporations - A broader, unified platform for the general media, publishers and e-learning software developers that increases interoperability for institutions - A world-class service and support organization benefiting from best-practices and infrastructure investments - Industry leading e-learning technology expertise including specialization on Microsoft's .NET platform and Microsoft technologies - A stronger company with a greater capacity to invest in research and development for new solutions over time Financial Details of the ANGEL Learning Transaction ANGEL Learning offers many of the same financial characteristics of Blackboard's business model, including an annual recurring subscription-based licensing model, ratable revenue recognition, a stable educational institutional client base and high renewal rates. Blackboard expects to realize greater revenue, profitability and cash flow following the integration of ANGEL Learning. The approximate purchase price of $95 million will include approximately $80 million in cash and $15 million in stock, net of cash acquired and excluding transaction costs. Assuming the merger closes in May 2009, Blackboard expects this transaction to be accretive on a pro forma non-GAAP basis for calendar year 2009, excluding the write off of deferred revenues in purchase accounting and non-recurring merger and integration costs. For financial reporting purposes, Blackboard expects the transaction to be dilutive on a GAAP and non-GAAP basis for calendar year 2009. Blackboard expects to realize significant efficiencies by leveraging shared development infrastructure, sales, marketing, administrative and other expenditures. Blackboard retained Thomas Weisel Partners LLC as its financial advisor and Cooley Godward Kronish LLP as its legal advisor. ANGEL Learning retained Evercore Partners as its financial advisor and Barnes & Thornburg LLP as its legal advisor.