Valuing Project Achieve

Harvard Business School Case # 201080

Case Software #XLS-826

Copyright 2010 President and Fellows of Harvard College. No part of this product may be
reproduced, stored in a retrieval system or transmitted in any form or by any meanselectronic,
mechanical, photocopying, recording or otherwisewithout the permission of Harvard Business
School.
Exhibit 2 Project Achieve's Assessment of the Competition

Product Price Comparison

Power Campus Chancery

NCS School America Software

Price (Year One)a $53,500 $18,200 $28,100 $13,200

Price (Year Two)a 7,000 2,500 2,500 0

Source: Company documents.

a
Prices based on average school size of 650 students.
Table A Project Achieve Estimated Overhead Costs
1999-2000

Marketing and Sales $2,003,100

Remote Hosting $1,380,000
R&D $1,786,000
HQ $1,355,726
$6,524,826
Exhibit 3 Selected Comparable Public Companies

May 1999 Market 1998

Capitalization 1998 Debt Sales
Company Business Description IPO Date $Millions $Millions $Millions
Advantage Learning Systems Provides learning information systems to grades K- 09/25/97 754.01 0.00 54.76
12, consisting of computer software and related
training designed to improve students' academic
performance by increasing the quality, quantity and
timeliness of performance data.

Click2learn. Com Provider of online learning solutions designed to 06/12/98 57.71 0.00 33.35
enable customers to create, distribute and manage
learning applications throughout an enterprise.

Educational Insights Develops and markets supplemental educational 04/15/94 13.20 0.93 39.54
materials, such as electronic games and learning
aids, activity books, science and nature kits, board
games and other materials for use in school and at
home.

Infonautics Corporation Information services company and provider of online 04/29/96 71.79 0.05 14.93
information. Properties include Electic Library,
Company Sleuth, Sports Sleuth, Job Sleuth,
Encyclopedia.com and Researchpaper.com.

Learn2. Com Creates and distributes online advanced learning 05/18/94 184.60 0.05 1.57
and training. Its products allow interactive multimedia
and animated courseware to be accessed instantly
on the Web.

National Computer Systems Provides services, software and systems for the pre-1980 988.69 19.00 406.02
collection, management and interpretation of data to
two broad markets: Education and Large Scale Data
Management.
Scholastic Corporation Publisher and distributor of children's books, K-12 02/24/92 798.94 254.50 1,058.40
textbooks, classroom materials and magazines,
instructional technology and entertainment products
such as TV programming, videos, movies and
internet services.

Sylvan Learning Systems Provides educational services to families and 12/09/93 1,394.25 12.50 440.33
schools through Learning Centers, Contract
Educational Services, English Language Instruction
and International Universities

Vcampus Corporation Provides interactive and on-demand educational 11/26/96 20.85 1.94 14.68
courseware for the online education and training
market through the World Wide Web.

Source: SDC, Compustat.

1998 Net
Income
$Millions
12.73

-5.16

-2.28

-17.45

-10.96

25.18
23.60

35.71

-19.81
Exhibit 4 Selected Comparable Companies' Monthly Returns

Sylvan
S&P Advantage National Learning
Industrials Learning Click2learn.c Educational Infonautics Learn2.com Computer Scholastic Systems Vcampus
Ltd. Sys Inc. om Inc. Insights Inc. Corp.CLA Inc. Sys Inc. Corp. Inc. Corp.
Jun94 -2.40% NA NA -10.80% NA NA -7.10% 5.60% 0.50% NA
Jul94 3.40% NA NA -3.00% NA NA 8.50% 16.90% 4.30% NA
Aug94 4.00% NA NA -25.00% NA NA 2.70% 2.00% 13.80% NA
Sep94 -2.50% NA NA 10.40% NA NA 4.80% 8.30% -6.80% NA
Oct94 2.30% NA NA 1.90% NA NA 6.40% -6.40% 4.30% NA
Nov94 -3.70% NA NA -29.60% NA -19.50% 5.20% 3.00% 15.30% NA
Dec94 1.66% NA NA 13.16% NA -36.36% 5.17% 8.51% -4.81% NA
Jan95 1.46% NA NA -6.98% NA 42.86% 2.23% -0.98% -3.80% NA
Feb95 4.06% NA NA 45.00% NA -3.33% 1.61% 0.00% -6.57% NA
Mar95 3.79% NA NA -15.52% NA 13.79% 6.35% 7.92% 0.00% NA
Apr95 2.90% NA NA -14.29% NA 4.55% 0.54% 2.75% -2.12% NA
May95 3.48% NA NA 4.76% NA 1.45% 5.97% -1.34% 5.04% NA
Jun95 2.86% NA NA 9.09% NA 62.86% 7.04% -1.81% 17.82% NA
Jul95 3.43% NA NA 10.42% NA 19.30% 9.68% 21.20% 39.52% NA
Aug95 -0.86% NA NA -22.64% NA 4.41% 1.80% -6.84% -5.00% NA
Sep95 3.62% NA NA 2.44% NA 18.31% -2.95% 2.45% 11.40% NA
Oct95 -0.20% NA NA -14.29% NA -29.76% 5.32% -1.59% -24.41% NA
Nov95 4.20% NA NA -22.22% NA 17.80% -11.63% 12.15% 0.00% NA
Dec95 1.51% NA NA -21.43% NA -19.42% 10.53% 12.27% 23.95% NA
Jan96 3.46% NA NA 63.64% NA -19.64% -9.69% -6.11% 12.61% NA
Feb96 1.27% NA NA -16.67% NA -2.22% 7.28% -4.45% -7.84% NA
Mar96 1.27% NA NA -10.00% NA -7.95% -2.47% -1.43% 15.79% NA
Apr96 2.16% NA NA 0.00% NA -14.81% 2.99% -4.73% 8.39% NA
May96 2.90% NA NA 5.54% -5.66% 44.93% 7.41% -4.96% 0.00% NA
Jun96 -0.08% NA NA -15.78% -36.00% 3.00% 11.49% -0.40% -2.58% NA
Jul96 -4.68% NA NA -16.67% -32.81% -38.83% -11.48% 5.24% -11.26% NA
Aug96 1.86% NA NA 10.00% 6.98% -9.52% -5.27% 3.83% 9.70% NA
Sep96 5.71% NA NA -4.55% -26.09% -10.53% 0.00% 7.01% 11.57% NA
Oct-96 1.82% NA NA -19.05% -8.82% -19.61% 1.68% 1.03% 3.05% NA
Nov96 7.46% NA NA 29.41% 3.23% -4.88% 4.88% 1.71% -7.25% NA
Dec96 -1.72% NA NA -18.18% -6.25% -23.08% 10.47% -9.73% 9.09% 3.92%
Jan97 6.19% NA NA 11.11% -16.67% 13.33% 7.75% -12.27% 3.51% 15.09%
Feb97 0.28% NA NA -20.00% -20.00% -16.92% -4.17% -44.07% 15.68% -11.48%
Mar97 -3.60% NA NA 3.10% -25.00% -11.50% 1.28% -14.39% -27.47% -11.11%
Apr97 6.04% NA NA -3.01% 0.00% -24.00% 2.38% -11.50% 21.72% -16.67%
May97 6.44% NA NA 0.00% -3.36% -18.44% -0.50% 19.00% 19.09% 15.00%
Jun97 4.36% NA NA -12.50% 106.95% 35.52% 0.50% 17.65% -5.23% 6.52%
Jul97 7.40% NA NA 7.14% -33.33% -4.76% 5.80% 0.71% 14.70% 12.24%
Aug97 -5.36% NA NA 3.31% -10.00% 22.48% 3.29% -2.84% -4.17% 18.18%
Sep97 4.98% NA NA 32.27% 22.22% -18.35% 19.09% 15.33% 17.39% 51.54%
Oct97 -3.77% 0.00% NA -23.15% -2.29% -20.00% 8.29% 2.53% -3.99% -12.69%
Nov97 4.71% -9.90% NA 20.62% -2.31% 3.10% 7.42% -5.71% -3.26% -25.58%
Dec97 0.79% -6.04% NA -9.22% -23.81% -18.19% -3.95% -1.80% -4.30% 3.13%
Jan98 2.25% 24.55% NA -23.19% -3.15% -3.68% -3.18% -6.67% 1.28% -21.21%
Feb98 6.97% 0.47% NA 20.77% 3.25% -5.78% -2.84% 13.21% 15.98% 8.65%
Mar98 4.89% 28.51% NA 0.00% 146.85% 4.11% 16.43% 6.62% 2.87% -29.20%
Apr98 1.09% -8.37% NA 6.25% -4.42% 331.30% 13.10% -11.83% 4.77% 8.75%
May98 -1.58% -14.29% NA -5.88% -28.48% -36.36% 11.11% 7.38% -7.34% -20.69%
Jun98 4.09% 1.39% NA 0.00% 0.00% -5.01% -3.00% -0.31% 7.38% -20.29%
Jul98 -1.11% 26.48% 2.07% -23.45% -14.81% -0.75% -0.82% 5.09% -13.36% 1.82%
Aug98 -13.08% -16.97% -33.78% 2.02% -32.59% -51.52% -7.29% -7.53% -24.67% -14.29%
Sep98 7.29% 32.17% 4.08% 12.04% 9.65% 48.45% -1.69% 9.68% 9.36% -18.75%
Oct98 7.81% 21.05% -4.91% -14.29% -35.29% -21.05% 35.09% -7.20% 32.09% -23.08%
Nov98 6.13% 20.11% -1.02% 33.33% 313.67% 49.32% -5.08% 20.76% -5.87% 93.33%
Dec98 6.66% 19.00% -27.08% -15.60% -20.89% -24.11% 17.41% 12.60% 4.95% -18.10%
Jan99 4.96% 2.09% 8.57% 11.08% 1.38% 3.54% 12.70% 5.59% 3.08% -17.90%
Feb99 -3.98% 12.11% -11.83% 20.00% -8.90% 0.00% 3.38% -13.02% 5.76% -30.77%
Mar99 4.24% -17.44% 11.94% -18.04% -6.76% 115.93% -16.26% -0.76% -17.67% 18.52%
Apr99 3.02% -15.09% -12.01% 1.68% 61.29% 9.46% -23.36% -3.26% -8.22% -18.75%
May99 -1.95% -15.64% 0.00% 0.00% -1.50% -8.65% 14.29% 2.58% 8.46% 50.00%

Source: Compustat
Exhibit 5 Financing History of Selected Comparable Private Companies

Date of Dates of Amount of

Company Business Description Founding Website Financing Financing Investors

Blackboard, Inc Develops technologies for teaching and 1997 www.blackboard.com 09/29/1998 3,100 Aurora Capital Partners
learning on the Internet. The Company 06/08/1999 12,500 Aurora Funds, Inc.
creates software tools for hosting virtual Carlyle Group,
campuses, university intranets and The Internet Capital Group
corporate training environments. Merrill Lynch Capital Partners
Novak Biddle Venture Partners, L.P.
Undisclosed Venture Firm

Classroom Connect Provides Internet resources, curriculum 1994 www.classroomconnect.com 09/01/1998 15,000 Brentwood Venture Capital
and training for educators and students round in process 31,000 Cambria Group, The
in kindergarten through 12th grade Hillman Company
classes. Intel Corp.
Media Technology Ventures
MediaOne Group, Inc.
US Trust Private Equity
Waller Capital Corp.

Family Education Network Provides educational services via the 1990 www.familyeducation.com 04/27/99 51,000 America Online, Inc.
Internet that connects parents, children DLJ Capital
and educators. The website contains Intel Corp.
national programming, shared practices, Morningside Group
community discussions, e-commerce Sprout Group
and a search engine for family/
education topics

Lightspan Partnership Provides interactive educational digital 1993 www.lightspan.com 12/01/1993 7,000 Accel Partners
video products to schools and private 02/07/1995 17,500 Comcast Interactive Capital Group
homes. The Company is delivering a 06/07/1995 17,500 Ignite Group
new generation of educational 09/20/1996 20,000 JAFCO America Ventures, Inc.
programming for digital video devices, 03/19/1997 5,000 Kleiner Perkins Caufield & Byers
including video-capable Windows and 06/24/1997 28,767 Liberty Media Group
the Sony Playstation. 03/10/1998 20,600 Microsoft
Nassau Capital, L.L.C.
Sony Corporation
Tribune Ventures

Source: SDCVentureXpert
Exhibit 6 U.S. Treasury Interest Rates for Selected Maturates on
June 7,1999

Three Months 4.77

Six Months 4.97
One Year 5.09
Ten Years 5.78
Twenty Year 6.27
Thirty Year 5.94

Source: http://www.bog.frb.fed.us/releases/H15/19990607/