NEW YORK — October 11, 2012 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2012 mergers and acquisitions trend report for the Education Industry.

The report analyzes M&A activity in the sector for the first three quarters of 2012 and compares it with data covering 2011. This market includes information and technology companies servicing the Education Industry, including the K-12, Post-Secondary, Childcare Services, and Corporate and Professional Training segments.

According to Berkery Noyes’ research, transaction volume in the Education Industry increased two percent from second to third quarter 2012. This stood in contrast with the first three months of the year, in which the number of transactions increased 28 percent. The median revenue multiple from 2011 through the first three quarters of 2012 decreased from 1.6x to 1.4x, while the median EBITDA multiple rose from 12.0x to 13.5x.

Deal value in the industry, due to the absence of any transactions totaling over $100 million in third quarter 2012, declined 39 percent compared to the previous quarter. Several of the largest transactions in third quarter 2012 were backed by private equity firms. This included Levine Leichtman Capital Partners’ acquisition of Mander Portman Woodward (MPW), a portfolio company of Apollo Group, for $85 million. Private equity acquirers have accounted for 59 percent of Education Industry transaction value thus far in 2012.

Meanwhile, strategic acquirers were responsible for 68 percent of transaction volume year-to-date, as opposed to 77 percent for the same timeframe in 2011. One notable third quarter 2012 transaction in K-12 Media and Technology, a segment that remained nearly constant, was McGraw-Hill Education’s acquisition of Key Curriculum Press. This transaction emphasizes the importance of Science, Technology, Engineering, and Mathematics (STEM) digital technologies.

“With the implementation of the Common Core standardized curriculum, the focus on content is becoming less about differentiation and more about delivery through emerging technology platforms,” stated Mary Jo Zandy, Managing Director at Berkery Noyes. “Interactive assessment tools that measure student progress, particularly in the quantitative disciplines, will thus become even more important in K-12 education as schools aim to meet specific testing benchmarks.”

Regarding other market segments in the industry, M&A activity pertaining to educational institutions increased 33 percent in the last three months, including a 25 percent improvement within the Professional Training Institutions segment.

“There are a few underlying factors contributing to the numbers in this report,” said Peter Yoon, Managing Director at Berkery Noyes. “The rapid adoption of e-Learning technology and the growing training needs of the existing corporate workforce, coupled with a tepid rate of new hiring, has led to a significant increase in corporate spending on outsourced training resources per employee.” Yoon continued, “Due to the strong recent growth in the sector, corporate training and professional education companies continue to attract interest from strategic and financial acquirers.”

A copy of the EDUCATION INDUSTRY M&A REPORT FOR THIRD QUARTER 2012 is available at the Berkery Noyes website.