NEW YORK — July 27, 2018 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2018 mergers and acquisitions trend report for the Education Industry.

The report analyzes M&A activity during the first half of 2018 and compares it with the four previous six-month periods from 2016 to 2017. This market includes information and technology companies servicing the Education Industry, including the Childcare Services, K-12, Post-Secondary, and Corporate and Professional Training segments.

Total transaction volume increased seven percent on a half year basis. Aggregate value declined 34 percent, from $9.37 billion to $6.17 billion. This followed a 21 percent rise in the preceding half year period. The peak for volume over the previous five half year periods occurred in first half 2018, whereas value reached its zenith in second half 2017.

Deal volume in the K-12 Media and Tech segment improved 32 percent in first half 2018, making it the sector with the largest half year rise throughout the industry’s tech-based sectors. High profile transactions year-to-date included NetDragon WebSoft’s announced acquisition of Edmodo, a communication and collaboration platform that targets teachers, students, administrators and parents, for $138 million; 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; Microsoft’s acquisitions of Flipgrid, an app that lets students record and share video, and Chalkup, a classroom collaboration platform for teachers and students; and Chegg’s acquisition of WriteLab, an AI-enhanced writing tool that offers instant feedback to students.

The number of transactions in both the Professional Training Technology and Services segments gained ten percent on a half year basis. High profile acquirers in the Processional Training segments year-to-date included NYSE with the 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; WebMD with the acquisition of Jobson Healthcare Information, a provider of healthcare information, education and marketing services targeted to physicians, pharmacists, and eye care professionals; Johnson & Johnson Institute with the acquisition of C-SATS, a cloud-based performance management system that evaluates surgeons and helps improve their skills; and Scantron with the acquisition of CASTLE Worldwide, a full-service licensure and certification testing company.

Higher Ed-Media and Tech volume remained about constant during the half year period. Notable segment deals in first half 2018 included Civitas Learning’s acquisition of ClearScholar, a student engagement platform used by colleges and universities; Oracle’s acquisition of Vocado, a cloud-based financial aid solution for higher education institutions; and Blackbaud’s acquisition of Reeher, which offers software and services to improve the efficiency and effectiveness of higher education fundraising efforts.

The largest Higher-Ed related transaction in first half 2018 was staffing firm Adecco Group’s acquisition of General Assembly for $413 million. General Assembly offers full-time courses in subjects such as web development, user experience design, digital marketing, data science, and machine learning.

As for the Childcare Services segment, notable transactions in first half 2018 included Dalian Sunlight Machinery’s announced acquisition of My Gym China for $514 million; Only About Children’s acquisition of Little Learning School for $114 million; Bright Horizons’ announced acquisition of Yellow Dot Nursery; and Leeds Equity’s acquisition of Endeavor Schools.

“A confluence of factors continue to help shape the evolving education sector,” said Peter Yoon, Managing Director at Berkery Noyes. “This includes rising local and state tax revenues, the adoption of innovative pedagogical and blended learning tools, continued investment in early stage edtech companies, and an increasingly receptive buyer universe, consisting of the larger strategic players who are now able to focus a bit more externally and a surging number of financial sponsors who have interest in the space.”

“K-12 companies are opportunistic regarding acquisitions with the most sought after areas being eLearning, intervention and assessments,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “We’ve had a long stretch of M&A sector activity that is continuing due to the quality of the targets in the market.”

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