2016-10-24 Berkery Noyes Releases Education Industry M&A Report For Third Quarter 2016
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NEW YORK — October 24, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2016 mergers and acquisitions trend report for the Education Industry.
The report analyzes M&A activity for the sector during the first three quarters of 2016 and compares it with data covering 2015. 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, the number of deals year-to-date declined nine percent compared to the corresponding timeframe in 2015. When examined on a quarterly basis, volume improved four percent. Total deal value year-over-year fell 70 percent, from $14.4 billion to $4.3 billion. Of note, there were five acquisitions with disclosed values above $500 million throughout the first three quarters of 2015, as opposed to one such deal thus far in 2016.
Regarding the combined Professional Training Technology and Services segment, volume stayed nearly the same on a quarterly basis with 26 acquisitions. Professional Training deals accounted for one-quarter of the industry’s aggregate volume over the last three months. High profile Professional Training related deals during this period included Pluralsight’s acquisition of Train Simple, an Adobe-centric video training company; General Assembly’s announced acquisition of Bitmaker, a Toronto-based coding bootcamp, which will allow General Assembly to expand from 15 to 25 campuses; and OnCourse Learning’s acquisition of The Institute for Professional Care Education, a provider of training and compliance solutions for non-medical home care and assisted living caregivers.
After remaining consistent in the second quarter, M&A activity in the K-12 Media and Tech segment decreased 19 percent, from 27 to 22 transactions. However, there was a six percent gain year-over-year, from 72 to 76 deals. Notable acquirers in the third quarter included McGraw-Hill Education with the acquisition of Redbird Advanced Learning, a digital personalized learning company; Khan Academy with the acquisition of Duck Duck Moose, which creates children’s mobile applications; Powerschool with the announced acquisition of SRB Education Solutions, a provider of complementary administrative and ERP solutions for K-12 school boards and districts in Canada; and The Riverside Company with the acquisition of n2y, a cloud-based special education publishing company focused on standards based curriculum products for individuals with special needs.
As for other markets covered in the report, transaction activity in the Higher-Ed Media and Tech segment experienced a 78 percent increase during this timeframe, from nine to 16 deals. The Childcare Services segment saw a 27 percent rise in volume on a year-over-year basis, from 15 to 19 acquisitions. Notable Childcare Services deals in third quarter 2016 included Morgan Stanley Global Private Equity’s acquisition of Cadence Education, which serves more than 20,000 students across its national platform of more than 150 schools across 20 states; and Quad C-Management’s acquisition of Rainbow Child Care Center, which provides early education services to more than 10,500 students and 121 schools in the Midwest, Mid-Atlantic, and Southeast U.S.
“Increasing utilization of data, the need for efficient interoperability of existing systems, and continued acceptance of technology that drives student outcomes or employee performance by administrators, chief learning officers, and CIOs, are all enabling factors that have helped to keep M&A activity healthy in the sector,” stated Peter Yoon, Managing Director at Berkery Noyes.
“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 THIRD QUARTER 2016 is available at the Berkery Noyes website.