Delisting

Equity Capital Markets – Case Study

1
Introduction
KAHOOT! AT A GLANCE OVERVIEW OF KAHOOT!’S DELISTING

• Kahoot! is a Norwegian online game-based learning platform founded in 2012.

 Kahoot! was acquired by Goldman
Sachs Asset Management,
Kahoot! Stock Price
• It is most well known for its learning games, also known as "kahoots", which are user- General Atlantic, KIRKBI Invest, 140
generated multiple-choice quizzes that can be accessed via a web browser or the Kahoot! app. Mr. Eilert Hanoa, certain other 120
investors and its management
• Product Offerings- Learning & development platforms, E-learning, Gamification, Game-based through a NOK 17.2 billion public- 100

learning, Interactive presentations, Trivia, Events, Conferences, Engagement, Formative to-private LBO on July 14, 2023 80
assessment, Compliance training, and Policy training.  The offer recommended by
60
Kahoot's board is NKr35 per
REGIONS share, valuing the company at 40

Revenue (in $ Millions) NKr17.2bn ($1.7bn). Following the 20

announcement, Kahoot's shares
200 increased by approximately 12% 0
to NKr34.8. 9 9 0 0 0 0 0 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 3
/1 /1 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2
R 11 / 20 / 28 5/ 8 / 17 / 25 2/ 4 / 12 / 23 7/ 2 / 10 / 19 / 28 4/ 8 / 17 / 26 1/ 4 / 13 / 24 6/ 2 / 11 / 20 / 29
150
% CAG  Kahoot's share price experienced /
10 12 2 7 9 1 2 4 9 11 1 6 8 1 1 3 8 10 12
158 ~ 65% a significant rise during the
100
Covid-19 pandemic due to
50 increased online learning but has
halved since INVESTORS
September 2021. SELLERS/EXITERS
0
2019 2020 2021 2022

OPERATIONS

500 24 M 1.4 M
EMPLOYEES ACTIVE USERS PAID SUBSCRIBERS
FINANCIAL ADVISORS LEGAL ADVISORS
FINANCIALS

$ 157 Mn $ 28.6 Mn 0.63

REVENUES EBITDA
Debt-to-EBITDA
(normalized)
2
TTM Q2 2023
 Rationalebehind
Rationale for the
theDeal
Deal
LBO Market “(…) accelerate the growth of
Kahoot!. We are impressed with the
 In Q1 2023, the global buyout deal volume fell by 26% YoY to 1552 company’s journey (…) We support
transactions and deal value plummeting by 51% YoY to $148.4 Billion the company’s mission to empower
due to macroeconomic and geopolitical factors. learners and educators worldwide,
 Kahoot’s LBO, or taking a public company private, was done with the aim of strengthening  The Public-to-Private (P2P) has defied this trend, YoY transactions which resonates with our core
almost doubling from 16 to 30 and value growing by 12% to $70.9 B in values and find the investment fits
through reorganisation and restructuring very well with KIRKBI’s long-term
 Typical target of leveraged buyout is a mature, non-cyclical company with high margins, Q1 2023
investment strategy”
 Public companies’ valuations have dropped with higher interest rates
predictable cash flows, low debt and minimal capital expenditures. Though Kahoot is still in its Thomas Lau Schleicher
creating a window for P2P. Chair Of Board, KIRBI
growth phase, it has low debt, its cash flows and margins have displayed strong growth, and  A stronger dollar has spurred cross-border P2P.
as a software company, it has low CAPEX, making it an ideal target.  Recent emergence of direct lenders as reliable financing providers for
 Value creation will be enhanced through concentrated ownership stakes, performance linked P2Ps has given PE sponsors additional speed and flexibility.
managerial compensation, highly leveraged capital structures and active governance by the “We are pleased to deepen our
investors. commitment to support Kahoot!’s
PE P2P activity in Europe long-term growth in collaboration
€ 60.00 with the broader co-investor
Opportunities Identified by Investors group (…)”
€ 50.00 Chris Caulkin
€ 40.00 MD, Head of Tech EMEA, GA
• Private Equity Investment: Kahoot has seen significant fluctuations in its stock price in recent years, € 30.00
taking company private can help focus on long-term growth and strategy while avoiding public market
€ 20.00
pressures.
• Favourable Market Conditions: Falling valuations on public markets have attracted the acquisition of € 10.00 “The acquisition will provide
listed companies by PE investors, which would allow for more strategic acquisitions to fuel expansion. € 0.00 significant opportunity for
• Expansion and Diversification: Investors looking to take advantage of the growing market for e- 2015 2016 2017 2018 2019 2020 2021 2022 2023 accelerating the company’s
learning tools and explore opportunities to expand beyond the education sector into corporate training journey to become the leading
and other sectors to become the leading learning platform.
E-learning Software
DealMarket
Value (€B) Deal Count learning platform in the world
(…)”
The E-Learning Software Market size was valued at USD 281 Billion in Eilert Hanoa
2022 and is predicted to reach USD 1023 billion by 2030 with a CAGR of CEO, Kahoot!
Strengths of the deal 17.53% from 2022-2030.​
“(…) our investment will help to
Global E-Learning Market (in Billions of USD) grow its impact and accelerate
• Proven success of co-investors: General Atlantic has been relatively successful with its value for all stakeholders.
investment in Kahoot in the past, with Kahoot maintaning momentum across its strategic key 1200 Through this transaction, we are
initiatives while driving its subscriber base and premium IP partnerships since then. 3% pleased to (…) contribute to its
1000 R 17.5
• Management Support: Kahoot’s management including CEO Hanoa are co-investing and are CAG further growth and innovation,
expected to stay on, aligning their interests while leveraging their experience. 800 organically and via M&A.”
• Leaders in sector: Kahoot! leads the market in for gamified e-learning and doesn’t have any 600 Michael Bruun
Co-head, PE, Goldman Sachs
significant competitors. 400
• Strong growth: Kahoot’s revenues grew by 14% YoY in Q2 2023, its EBITDA grew by 60% and the
200
operating cash flow grew by 90%, signalling strong growth in the business.
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Transactions Highlights and Specificities
EQUITY STORY & USPs EDTECH MARKET HIGHLIGHTS FINANCING AND EXIT ROUNDS

 The main USP behind their digital product is  Actors/Peers

£ 1.31B
the concept of learning through playing and
200 £ 185.34M
games.  Trends post covid M
£ 146.97M

 XXX  XX £ 108.18M
66.2
M £ 21.96M
 XX
0
2019 2020 2021 2022 2023 2024 2025
Financing Exit
Round Round

TIMELINE: FROM GENESIS TO THE PUBLIC-TO-PRIVATE LEVERAGED BUYOUT

Jul. 14, 2023 Aug. 15 – 21 2023 Sept. 28 – 29 2023 Oct. 9 – 16 2023 Nov. 10, 2023 Jan. 23, 2024
Kahoot! ASA announces an agreement for a Acquisition by
Sept. 28: Announced Oct. 9: Preliminary results of the
recommended voluntary all cash offer from Aug. 15: Kahoot!'s Board, Goldman Sachs
that Kangaroo BidCo voluntary cash offer are announced
the Private Equity business within Goldman excluding conflicted Asset Management,
waived the minimum Oct. 11: A settlement notification for A mandatory
Sachs Asset Management, with co-investors members, unanimously General Atlantic,
acceptance condition the voluntary cash offer is issued notification of
General Atlantic, KIRKBI, Glitrafjord AS and recommends shareholders KIRKBI Invest, Mr.
for the voluntary cash Oct. 12: Disclosure by Goldman transactions by close
certain other investors and management accept Kangaroo BidCo's Eilert Hanoa, certain
offer Sachs Group, Inc. in Kahoot! ASA is associates of primary
shareholders to acquire all issued and voluntary cash offer to other investors and
Sept. 29: Update on made insiders is made
outstanding shares in Kahoot! at a best and acquire all Kahoot! Shares. its management
regulatory approvals of Oct 16: Disclosure of passing the
final offer price of NOK 35 per Share, Aug. 21: Insiders accepted through a NOK 17.2 B
the voluntary cash mandatory offer threshold in Kahoot!
representing an aggregate equity purchase the cash offer for their shares public-to-private LBO
offer is provided ASA is made
price of NOK 17.2 billion

IPO Delisting

Oct. 10, 2019 Jul. 27, 2023 Sept. 8 – 18 2023 Oct 6, 2023 Nov. 2 – 9 2023
Kahoot! has initiated the offer period for a final 4
Nov. 2: Mandatory notification of trade by primary insiders and
cash offer of NOK 35 per share by Kangaroo Sept. 8: Kahoot! extended the offer period for the
IPO on the Oslo Final reminder of the disclosure of major shareholding is issued
BidCo, starting 28 July 2023. This offer, endorsed voluntary cash offer of NOK 35 per share and approved
Stock Exchange expiry of the offer Nov. 8: Another mandatory notification of trade by primary
by Kahoot!'s board, values the company at Norwegian and electronic acceptance forms
under the ticker period for the voluntary insiders and disclosure of major shareholding is provided
approximately NOK 17.2 billion. Shareholders Sept. 18: Kahoot! updated on the regulatory approvals
symbol of KAHOT cash offer is issued Nov. 9: Kangaroo BidCo completes the recommended
have until 25 August 2023 to accept this offer, of the voluntary cash offer voluntary best and final cash offer for Kahoot! ASA shares
which is not extendable beyond 6 October 2023.
Aftermath and
Transactions Future Outlooks
Highlights and Specificities
Threats to investment Success Peers Stock Performance Evolution since LBO

• Regulatory Changes: Changes in regulations related to education on online teaching platforms

could impact operations and expansion plans. China’s ban on profiting from teaching K-12 subjects
thwarted Kahoot’s Asian expansion plans under Softbank.
• Market Saturation: The EdTech market is getting increasingly saturated, especially in regions like
Asia, where expansion plans have fallen short in the past. Intense competition could pose challenges
to its expansion and differentiation plans
• Post-pandemic adjustment: Kahoot needs to adjust to the new reality of businesses and individuals
using less of digital services that they heavily leaned on till the year before, while operating in
inflationary and recessionary environments. Grafico
Present weaknesses of Kahoot’s Operations

 Dependency on Education Sector: The educational market is susceptible to downturns through

budget cuts, decreased investments and changes in training needs.
 Reliance on organic growth: Kahoot has shown impressive organic growth, but it may lack a well-
defined strategy for acquisitions or strategic partnerships to expand its user base or access new
markets.
 Monetization Strategy: While Kahoot offers a freemium model, its long-term monetization strategy Peers Returns since Kahoot!'s delisting
needs to be clear and sustainable. Its ability to convert users into paying customers and to develop
other revenue streams will be crucial for long term success.

Top 10 EdTech Trends Global Education VC funding (£ billion)

Grafico

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Sources: Company Website & Reports; HolonIQ, March 2022
Aftermath of the Deal Overview Rating Leverage Conclusion

 Since the delisting, Kahoot’s stock has performed the broader global online education service
companies.

The stock lies in the middle of a wide and strong rising trend in the short term and a further rise
within the trend is signaled. Given the current short-term trend, the stock is expected to rise 17.99%
during the next 3 months and, with a 90% probability hold a price between $3.99 and $4.51 at the
end of this 3-month period.

 According to Kahoot! ASA’s latest financial reports and current stock price. The company's current
PE Ratio is 360.00. This represents a change of -97.51% compared to the average of 14.46K of the
last 4 quarters.

 Revenues in FY 2024 are expected to reach 199$ Million (+19%), while Adj. EPS growth is
forecasted at (+83.5%)

 Dec-23 price targets have been increased to $34.6 (vs.prior $20.5) based on Adjusted EBITDA of
$61.3M (BB)