Keypath Shareholders Win $4.85M Settlement in EdTech Merger Lawsuit

WILMINGTON, DE – December 01, 2025

Shareholders of Keypath Education International, Inc., an online education services provider, have reached a proposed $4.85 million settlement in a class action lawsuit challenging the terms of the company's 2024 take-private merger. The agreement, if approved, will provide additional compensation to former investors who alleged that the deal orchestrated by majority shareholder Sterling Partners undervalued the company and served the interests of insiders over those of public stockholders.

The settlement brings a significant chapter to a close in the contentious acquisition of Keypath, a player in the increasingly competitive Online Program Management (OPM) market. The lawsuit, filed in the influential Delaware Court of Chancery, accused Sterling Fund Management, its affiliates, and several Keypath executives and directors of breaching their fiduciary duties by engineering a transaction at an unfair price.

This resolution underscores the intense scrutiny applied to take-private mergers, particularly in technology-driven sectors where valuations can be complex and controlling shareholders hold significant sway. The proposed payout offers a measure of financial recourse for investors and shines a light on the legal mechanisms designed to protect minority shareholder interests.

A Merger Under Scrutiny

The dispute originated from the September 2024 merger in which an affiliate of Sterling Partners acquired all outstanding shares of Keypath it did not already own. At the time, Sterling, a private equity firm, was already Keypath’s majority owner, controlling approximately 66% of its stock through CHESS Depositary Interests (CDIs) on the Australian Securities Exchange.

The deal offered public shareholders AUD$0.87 in cash per share, a price that the company’s special committee argued was an attractive premium and provided much-needed liquidity in a challenging market. The committee cited slowing growth across the OPM sector and difficult financial conditions as key factors in its recommendation, suggesting the deal offered certain value in an uncertain environment. Following the transaction, Keypath was delisted from the ASX and taken private.

However, a group of prominent investors, including Copia Investment Partners and Maso Capital Investments, disagreed. Their lawsuit, Copia Investment Partners Ltd., et al. v. Sterling Fund Management, LLC, et al., alleged that the process was flawed. The plaintiffs claimed that as the controlling stockholder, Sterling Partners had a duty to ensure the deal was entirely fair to minority investors, but instead orchestrated a transaction that benefited itself at their expense. Allegations pointed to an unfair process and an inadequate price that failed to reflect Keypath's true long-term value, particularly its strategic focus on high-demand healthcare programs in the U.S. and Asia-Pacific markets.

While the defendants, including Sterling Partners and individual directors, have denied all allegations of wrongdoing, they agreed to the $4.85 million settlement to avoid the cost, risk, and distraction of continued litigation. The agreement represents a compromise to resolve the claims without any admission of liability.

A Tangible Victory for Investors

For the affected shareholders, the settlement represents a clear financial victory. The $4.85 million cash fund, once approved, will be distributed among all former investors who held Keypath common stock or CDIs and received the cash consideration during the September 11, 2024, merger closing. This group, defined as the "Class," includes a wide range of individual and institutional investors.

One of the most significant aspects of the settlement is its streamlined distribution process. Eligible Class Members will not be required to submit a claim form to receive their portion of the funds. Instead, payments from the Net Settlement Fund—the amount remaining after attorneys' fees and expenses are deducted—will be distributed automatically on a pro-rata basis. The payment mechanism is designed to mirror how shareholders received their original merger consideration, simplifying the process for thousands of investors.

The per-share recovery will be calculated by dividing the Net Settlement Fund by the total number of eligible shares. While the exact per-share amount depends on the final court-approved deductions for legal fees and the total number of shares, the settlement provides a tangible increase over the original AUD$0.87 per share. This additional payment effectively serves as a court-sanctioned correction to the initial merger price, validating the shareholders' claims that the company was undervalued.

Delaware's Watchful Eye on Corporate Governance

The case's progression through the Delaware Court of Chancery is itself significant. The court is a premier forum for corporate law in the United States, known for its deep expertise in handling complex M&A disputes and its rigorous enforcement of fiduciary duties. The fact that this settlement was reached under its jurisdiction sends a powerful message to corporate boards and controlling stockholders across all industries, including the technology sector.

This outcome reinforces the legal principle that even with a special committee's approval, take-private transactions led by majority owners will face exacting judicial review to ensure fairness for minority investors. The court's involvement provides a crucial check on corporate power, ensuring that the process is not merely a formality but a genuine effort to secure the best possible outcome for all shareholders.

A formal Settlement Hearing is scheduled for January 13, 2026, before Chancellor Kathaleen St. J. McCormick. The hearing will determine whether to grant final approval to the settlement as fair and reasonable, certify the class for settlement purposes, and rule on the proposed plan for allocating the funds. Any updates or changes to the hearing will be posted on the official settlement website, www.keypathstockholdersettlement.com.

Shareholders who wish to object to any part of the settlement, including the proposed attorneys' fees, must file their objections with the court and serve them to counsel for both parties by December 30, 2025. This process ensures that all voices can be heard before the court makes its final determination, further cementing the transparency and accountability that the Delaware legal system aims to uphold.