Francisco Partners, a private equity investment firm focused on technology-based businesses, has acquired Follett School Solutions, whose products include the Destiny Library Manager used by most K–12 school libraries in the United States and the Aspen Student Information System. The company is also a major distributor of print and digital content for educational institutions available through its Titlewave ecommerce platform. Follett School Solutions was previously part of Follett Corporation, a family-owned business tracing its roots to 1873 and owned by the descendants of its founder, Charles W. Follett.
Follett Corporation, while divesting its Follett School Solutions division, retains ownership of Baker & Taylor, a major supplier of books and other content to libraries; and Follett Higher Education, which operates college bookstores and virtual storefronts. Reflecting the proportions of the divestment, 1,500 employees were employed by Follett School Solutions out of a total of 9,000 for all of Follett Corporation. Follett School Solutions ranks as one of the largest companies in the library technology sector, with products implemented in over 75,000 schools, but was a relatively small part of Follett Corporation's overall business interests. Prior to this divestment, annual revenues for Follett Corporation totaled about $3 billion.
As part of Follett Corporation, Follett School Solutions was led by Britten Follett, a fifth-generation member of the Follett family and a board member. In February 2019 she was appointed executive vice president of Follett Corporation, with responsibility for its Follett School Solutions. She previously served as vice president for marketing.
With Francisco Partners' acquisition of this business unit, a new company formed, Follett School Solutions, LLC, and a new board of directors will oversee it. Retaining the executive leadership and entire workforce, the company will continue to be headquartered in McHenry, IL. An agreement licensed perpetual use of the Follett brand, and the operating name of the company remains unchanged. This detail seems a bit unusual. In most cases, the company divesting a business unit would not permit use of the primary brand, especially when associated with a family business. Despite the name, Follett School Solutions going forward has no direct involvement with Follett Corporation.
Follett School Solutions will be led by two Chief Executive Officers with separate areas of focus, both reporting to the new board. Britten Follett exits her role for Follett Corporation and will serve as CEO for content. Paul Ilse, an operating partner for Francisco Partners and former CEO for discovery education, was named CEO for technology. Francisco Partners acquired majority ownership of Discovery Education in February 2018.
Follett's Role in K–12 School Library
Automation and Educational Technologies Follett School Solutions was formed in April 2014 when Follett Corporation undertook a major reorganization of its businesses serving the K–12 sector, merging three operating divisions, Follett Educational Services, Follett Library Resources, and Follett Software Company. Each of the incumbent business units had previously operated separately, though with increasing overlap.
Follett has been involved in library automation in the K–12 sector since 1984. In that year the Follett Library Company acquired The Library Software Company, including the Circulation Plus automation system, from its founders Bob Skapura and Joe Ward. In 1985, a new operating division was formed, Follett Software Company, under the leadership of Chuck Follett. He served as president of Follett Software Company through 1998, when Thomas J. Schenck assumed that role. Chuck Follett was promoted to roles of increasing responsibility, including as chief executive officer of Follett Corporation from 2010–2012. Britten Follett, daughter of Chuck Follett, has extended the leadership of Follett School Solutions to an additional generation.
Circulation Plus prospered as the company's flagship library automation product through the early 2000s. Circulation Plus was originally created for Apple and MS-DOS computers and eventually was offered as a Windows application. By 2002, Circulation Plus and its companion product Catalog Plus were used in over 37,000 libraries.
Follett Software Company launched the web-based Destiny Library Manager in the 2003. As it matured in subsequent years, most of the libraries using its legacy products migrated to Destiny, which has steadily grown to serve over 75,000 libraries. Destiny was designed especially for managing school libraries at the district level, a much more efficient approach than the previous products, which usually were implemented for individual school libraries.
In addition to the ongoing development of Circulation Plus and organic growth of library customers, Follett Software Company expanded its market presence through acquisitions. Follett purchased its chief competitor, consolidating much of this sector and gaining a dominant position in the K–12 school library arena that it has maintained ever since. Follett Software Company acquired the library automation division of Sagebrush Corporation in June 2006. Sagebrush had previously acquired Winnebago Software Company and Nichols Advanced Technologies and had developed the Info- Centre automation system for K–12 school libraries. Sagebrush Corporation was also a major distributor of books to school libraries. That business eventually became part of Mackin Library Services.
Follett has made other business acquisitions in the K–12 educational technology sector beyond library automation. In October 2010 Follett Software Corporation acquired X2 Development Corporation and its Aspen student information system. Aspen continues to be a successful, though not dominant product in this category, and continues to be marketed, supported, and further developed. In August 2006 Follett acquired TetraData for its suite of data warehousing and analytics technologies. Although Follett continued to enhance the TetraData suite, it was phased out by about 2012.
Follett acquired NextTier Education and its platform designed to help students apply for post-secondary education programs in December 2018. This acquisition was featured in the January 2019 Issue of Smart Libraries Newsletter. Follett discontinued The NextTier platform in 2020. Fishtree, a company that had developed an adaptive learning platform based on machine learning, was acquired by Follett in July 2018. (See Smart Libraries Newsletter August 2018). This technology serves as the basis for Follett's new MyDestiny product.
Francisco Partners
Francisco Partners, a major private equity firm with over $25 billion in assets under management, focuses its investments on technology companies spanning many industries, including health care, financial services, and technical infrastructure. Some of its other portfolio companies in the educational technology sector include Renaissance, specializing in learning analytics for PreK–12 schools (acquired in July 2018); Discovery Education, a provider of print and digital textbooks and curriculum materials (majority ownership acquired February 2018); Mystery Science, a provider of K–5 STEM curriculum content (acquired via Discovery Education Oct 2020); Freckly Education (acquired by Renaissance in May 2019); and Vital- Source Technologies, acquired from Ingram Content Group in April 2021.
The acquisition of Ex Libris by Francisco Partners In 2006 was an important launch point toward its current position in the library technology industry. The acquisition of Ex Libris by Francisco Partners, along with its follow-on acquisition of Endeavor Information Systems, led to the development of Primo and Alma. Through a succession of other private equity transitions, Ex Libris became the dominant provider of technology products to academic and research libraries and was ultimately acquired by ProQuest.
Impact on K–12 Libraries
The market share for Destiny among US school libraries is higher than that captured by any other company in the library sector. Out of the approximate 100,000 school libraries in the US, about 75,000 use Follett Destiny. In comparison, Pro- Quest, counting all its resource management products (Alma, Aleph, Voyager, Sierra), holds a 53% market share among all US academic libraries.
The change of ownership of Follett School Solutions does not result in additional market consolidation. This move does not reduce the number of players in the library technology industry, and it does not narrow the products available. Francisco Partners states that it does not plan to fold the company into any of its other educational technology business and that the company will operate independently. It may make follow-on acquisitions to strengthen the market position to complement its product offerings in the future. Bringing new business or technology assets to strengthen an acquired company is a common strategy for investment firms. Francisco Partners followed this approach with Ex Libris.
As the dominant provider of library management solutions for K–12 libraries in the US, any change in the business status of Follett School Solutions warrants attention. There are no indications that the business was not generally successful and profitable. Its flagship product Destiny has achieved an impressive customer base in the US K–12 sector and continues to see strong sales, as documented in the annual Library Systems Report. The divestment signals that Follett Corporation was not positioned to take the business forward to its expected potential. The sale to Francisco Partners brings two important factors, investment and expertise. Francisco Partners will be able to infuse additional resources into the company to accelerate its development strategy and to expand its market position. Because it focuses entirely on technology companies, Francisco Partners brings substantial experience in supporting the refinement and execution of product development strategies.
Competitors in the K–12 School Library Market
Follett School Solutions holds the largest portion of the market for K–12 school library technologies in the United States. Other companies offering solutions for these libraries include COMPanion, with its Alexandria integrated library system; LibraryWorld; The Library Corporation, with Library.Solution for Schools; and the open source OPALS ILS, supported by Media Flex. Internationally, a different set of companies and products are used by the school libraries of each country or region. Oliver and Orbit products from Softlink are widely used by schools in Australia, New Zealand, and other countries.
Looking Forward
Its acquisition by Francisco Partners marks a new chapter for Follett School Solutions. Going forward, expected changes might include more aggressive product development strategies, with initial focus on products such as MyDestiny and Destiny Discovery Engage. The new company seems well positioned to explore growth opportunities through marketing its products beyond its established presence in the US and Canada. Other possible moves include tapping into technologies and educational content through other Francisco Partners portfolio companies, such as in learning analytics or additional digital curriculum resources. We can anticipate from Follett School Solutions, as a Francisco Partners company, more ambitious business strategies and faster technical development than can be accomplished through the more conservative business processes typical of large family-owned businesses such as Follett Corporation. While it is a bit unexpected for Follett Corporation to jettison one of its major business divisions, Francisco Partners has a history of strengthening the prospects of companies in the educational technology sector.
