March 1, 2016 HIGHER-ED MEDIA AND TECH DEAL ACTIVITY DRIVES INCREASE IN EDUCATION VOLUME

Berkery Noyes’ Education report for full year 2015 revealed that transaction volume improved 26 percent on a year-to-year basis. Aggregate value rose 52 percent, from $11.68 billion to $17.75 billion. The industry’s most active strategic acquirer in 2015, either directly or through an affiliated business, was Bertelsmann with four transactions.

Bertelsmann acquired Redilearning, an online learning company that serves the senior care sector; Academy Medical, a provider of continuing education content for various healthcare providers; YoBoHo, a digital media company that specializes in creating original content for children; and Alliant International University, a network of five California-based professional schools.

The Higher-Ed Media and Tech segment experienced a 68 percent increase in volume, making it the sector with the largest yearly gain. Notable acquirers in the segment included Cengage Learning with the acquisition of Pathbrite, a web-based portfolio tool that allows students to store their completed coursework; The Gordian Group with the acquisition of Sightlines, a provider of facilities benchmarking data and expertise; and Leeds Equity Partners with the acquisition of Campus Labs; a software platform for colleges and universities to make data driven decisions ranging from accreditation to student retention to effective operations.

Private equity firms are increasingly being drawn to the education and training sector, given the sheer scale of the market, the favorable lending environment, and the increasing number of companies that are growing with subscription based revenue models in the space. The largest area of activity in 2015 was in the corporate and professional education space as the need for continuing education and workforce development continues to expand while technology has improved the delivery and efficacy of instruction.

“The increased deal value derived importantly from the significant participation of strategic acquirers in 2015 deal activity,” said Mary Jo Zandy, Managing Director at Berkery Noyes. “A combination of content with technology yielded the highest transaction value premiums. Despite the recent turbulence in the capital markets, we expect the growing usage of technology in education and training to secure high transaction values in 2016.”