Arco Platform Limited, or Arco or Company (Nasdaq: ARCE), today announced that it has entered into a definitive agreement (the “Purchase Agreement”) to acquire 75.1% of the share capital of INCO Limited (d/b/a isaac), the provider of an all-in-one platform that offers a suite of financial and software products to K-12 schools (the “Transaction”). The purchase price for the Transaction will be paid in the form of Arco equity interests. Prior to the Transaction, Arco already held 24.9% of the issued and outstanding equity interests of isaac.
The acquisition of isaac significantly expands Arco’s footprint in Brazil’s education ecosystem by increasing the scope of its portfolio of products, making Arco a true one-stop-shop for our partner schools, while establishing closer relationships with families. We made our decision to acquire isaac after being an early investor in the company and gaining confidence not only in its business model and growth potential as a standalone company but also in the synergies and opportunities that will arise from the combination of the two businesses as we become the world’s largest operating system for schools.
Ari de Sá Neto, CEO and founder of Arco
isaac was founded with the mission to propel schools to transform the future of education and is building the platform of choice for schools in Brazil, consolidating front and back-office financial and software solutions into a single interface. By partnering with isaac, schools receive access to a suite of services that allow them to become better businesses. isaac’s primary product, the “revenue guarantee,” streamlines billing and collections while eliminating financial risk for schools and providing a smooth payment experience for parents. Its strong product-market fit translated into accelerated growth, leading isaac to serve over 850 private schools throughout Brazil, and to guarantee approximately R$2.0 billion in annual payment volume of over 280,000 students1.
Combining Arco and isaac solutions will provide school owners with more tools to offer high quality education to all students. We are joining forces with Arco because there is a huge opportunity to utilize each other’s strengths to build an even better business. We will continue to build the isaac brand and culture in our own unique way, and we believe Arco is the best partner to help us do this over the long term.
David Peixoto, CEO and co-founder of isaac
With the Transaction, Arco further consolidates its leading position in the private education segment to become the world’s largest operating system for schools. The Transaction (i) significantly increases Arco’s total addressable market with the addition of a new vertical with high growth potential and strong unit economics, (ii) accelerates isaac’s growth through cross-sell opportunities in Arco’s large school base, (iii) increases Arco’s talent density and strengthens important capabilities such as technology, product, and data science that will complement and foster Arco’s innovative culture.
A supporting presentation containing additional information on isaac’s business and the strategic rationale underlying the Transaction can be found on Arco’s website at https://investor.arcoplatform.com/events-presentations/presentations/.