WebAssign, a 180-employee online learning company that originated at N.C. State University, has been acquired by a large Boston-based textbook publisher and digital education company for an undisclosed sum.
The acquiring company, Cengage, is absorbing all of WebAssign’s employees, most of whom work out of the company’s headquarters at N.C. State’s Centennial Campus.
That, said WebAssign CEO Alex Bloom, is “a great reflection of the people and the products and the technology that we’ve built. I think it’s also a good signal of Cengage’s commitment to this area.”
Cengage is a privately held company with about 5,000 employees and $1.8 billion in annual revenue.
“I think WebAssign was, and is, a great Raleigh success story,” said Bloom. “Born out of N.C. State, we never took any outside funding ... and we bootstrapped this business from an idea at N.C. State into a 180-person company.”
WebAssign’s flagship product, also called WebAssign, is an online grading and assessment tool used primarily in higher education in STEM subjects – science, technology, engineering and math. More than 1.7 million students at more than 2,700 educational institutions use WebAssign annually.
WebAssign grades homework and quizzes tackled by students online and, based on the students’ answers, provides personalized feedback on what steps they should take to remedy their deficiencies. The company has partnered with more than 30 textbook publishers, including Cengage.
WebAssign, which was originally called Advanced Instructional Systems, was launched at the university in 1997 and spun out in 2003. Bloom declined to disclose WebAssign’s annual revenue but said the company is profitable and has enjoyed double-digit revenue growth each year for the past decade.
Bloom said the impetus for selling the company was that the family of the company’s late founder and former CEO, which was the majority shareholder in the business, didn’t play an active role in the business and wanted to move on.
John Risley, who founded the company while he was a physics professor at N.C. State, was WebAssign’s CEO until he died of cancer in 2013.
“He went too soon, that’s for sure,” said Bloom, who joined the company as president in 2012.
But the company’s workers are benefiting from the sale because WebAssign became employee-owned under an ESOP, or employee stock ownership plan, that was adopted in 2012.
As a result of the sale to Cengage, the value of each employee’s ESOP account “basically more than doubled” compared with the last pre-sale valuation conducted by an independent appraiser, Bloom said.
Bloom said he will remain with Cengage as a consultant after WebAssign is fully integrated into the business.
“The door is open and the opportunity exists for me to find the right role, personally, within the new organization,” he said.