2019-01-17 Berkery Noyes Releases Education Industry M&A Report For Full Year 2018

NEW YORK — January 17, 2019 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2018 mergers and acquisitions trend report for the Education Industry.

The report analyzes M&A activity in the sector during 2018 and compares it with data covering 2016 and 2017. This market includes information and technology companies servicing the Education Industry, including the Childcare Services, K-12, Post-Secondary, and Corporate & Professional Training segments.

Transaction volume increased nine percent on a year-to-year basis. Strategic volume saw a three percent uptick whereas private equity backed volume gained 25 percent. Total value in 2018 declined eight percent over 2017, from $16.81 billion to $15.52 billion. However, value more than tripled in 2017 over 2016.

The most active acquirer in 2018, either directly or through an affiliated business, was Leeds Equity Partners with seven transactions. Along these lines Leeds Equity acquired:

• Education Partners, a software platform that helps college students with the financial aid process;
• Pass Perfect, a provider of Financial Industry Regulatory Authority (“FINRA”) license exam training to the financial services sector;
• Keir Educational Resources, which offers training solutions for financial services professionals;
• Bluepoint Leadership Development, a leadership training and content company;
• Chalk & Wire, a learning assessment tools and credentialing solutions business;
• Endeavor Schools, which owns and operates 37 private preschool to 12th grade schools in the US; and
• Select assets from IT Management and Leadership Institute.

The K-12 Media and Tech segment improved 19 percent over the past year, which was close to its 2016 level. Notable deals in the K-12 Media and Tech segment during the year included Veritas Capital Partners’ acquisition of Cambium Learning Group, an educational technology company that delivers solutions through its instructional products Learning A-Z, ExploreLearning, and Voyager Sopris Learning, for $703 million; Alpine Investor’s announced acquisition of Riverside Clinical and Standardized Testing from Houghton Mifflin Harcourt for $140 million; NetDragon WebSoft’s announced acquisition of Edmodo, a communication and collaboration platform that targets teachers, students, administrators and parents, for $138 million; and Francisco Partners Management’s announced acquisition of a majority stake in Discovery Education, a provider of digital content and professional development for K-12 classrooms, for $120 million.

M&A activity in the Higher-Ed Media and Tech segment underwent a ten percent rise on a yearly basis. Notable segment acquirers in 2018 included Wiley with the acquisition of The Learning House, a cloud-based technology platform that helps colleges and universities create, manage, and grow online degree programs and courses, for $200 million; LendingTree with the acquisition of Student Loan Hero, a personal finance website that helps student loan borrowers manage their student debt, for $60 million; Elsevier with the acquisition of Aries Systems, a provider of scientific publication workflow solutions; Oracle with the acquisition of Vocado, a cloud-based financial aid solution for higher education institutions; and Blackbaud with the acquisition of Reeher, which offers software and services to improve the efficiency and effectiveness of higher education fundraising efforts.

Deal volume in the Professional Training Services segment increased 28 percent from 2017 to 2018. Of note, Professional Training Services nearly overtook K-12 Media and Tech as the industry’s most active sector in 2018. Notable transactions in the combined Professional Training Technology and Services segments over the past year included Intertek Group’s acquisition of Alchemy Systems, a provider of food and workplace safety training for production workers, for $480 million; Bertelsmann’s announced acquisition of OnCourse Learning, a continuing education, pre-licensing and corporate training solutions company; NYSE’s announced acquisition of Radiate, which offers a library of more than 2,000 short-length video lessons taught by over 100 global CEOs and thought leaders; Golden Gate Capital’s acquisition of Vector Solutions, an eLearning and workforce training company; and Oracle’s announced acquisition of Iridize, a creator of interactive product guides and walkthroughs for employee training.

“Financial sponsors have been quite active in the education space,” said Peter Yoon, Managing Director at Berkery Noyes. “Of increasing interest are education services and technology that help to improve teacher efficiency and effectiveness. This includes assessment and teacher professional development companies, as well as other instructional improvement systems.” Added Mary Jo Zandy, Managing Director at Berkery Noyes, “Acquirers are increasingly interested in e-learning solutions that will both complement and build upon their existing products.”

A copy of the EDUCATION INDUSTRY M&A REPORT FOR FULL YEAR 2018 is available at the Berkery Noyes website.