Acquisitions in the Education and EdTech Sector in 2023

The following is a summary of mergers and acquisitions transactions in the education and edtech sectors in 2023.  We try to update this post every week as we close more deals and learn of other deals that have closed in the sector.

The education and edtech sectors have seen a marked slowdown in activity so far in 2023.  This is following a significant drop in valuations in 2022 as edtech companies no longer benefited from the COVID boost.  That said, valuations for small, medium, and large edtech companies are back to their normal pre-COVID levels and are still significantly higher than valuations for traditional businesses, with the average small and medium-sized edtech companies being valued at approximately 3X trailing twelve-months revenue.

Acquisitions in the education and edtech sectors in 2023 so far

Below is a summary of the mergers and acquisition transactions in the education and edtech sectors so far in 2023.  This list is updated every two weeks.

In November, Byju announced that it is in talks to sell Epic, its digital reading platform based in the U.S., for $400 million. The potential buyer was not disclosed.

Academic Partnerships has agreed to acquire Wiley’s online program management (OPM) division for approximately $110 million.

DaySmart, a business management company, acquired Sawyer, a business management company focused on the K-12 extracurricular activities market. The amount was not disclosed.

Flywire, a Boston-based software and payments company, acquired StudyLink, a student admissions company in Australia, for an undisclosed amount.

GMB Architecture and Engineering acquired Up and Up, a marketing firm focused on higher ed, for an undisclosed amount.

Enrollify, which offers professional development programs for higher ed marketing professionals, was acquired by Element451, a higher ed student engagement platform.

DaySmart, a business management software company, acquired Sawyer, which provides scheduling and payment solutions for K-12 extracurricular activities. The purchase price was not disclosed.

In October, Instructure,  the edtech company that developed Canvas, a web-based learning management system, and MasteryConnect, an assessment management system, agreed to acquire Parchment, a digital credential company, for $835 million.

Rise In, a Web3 education platform, acquired the Web3 edtech company BlockBeam.

BibliU, a London, UK-based EdTech company, acquired Texas Book Company, a Texas-based industry leader in delivering learning materials to higher education institutions across the U.S.

Accelerate Learning, which produces STEM curriculum, acquired Kide Science, an online library of play and story-based lesson plans and professional development materials for kindergarten through 3rd grade teachers.

Discovery Education, a K-12 digital curriculum and learning services provider backed by Clearlake Capital, acquired DreamBox Learning, a provider of online software for math and reading education, for an undisclosed amount.

The Malvern School, a chain of early childhood education centers, was acquired by Busy Bees, an international early childcare provider that’s expanding in North America.

Ellucian, a leading provider of school management solutions, announced that it will acquire Tribal Group plc, a UK-based services and software provider.

In September, Meazure Learning, a test developer, acquired Examity, a leading online exam proctoring service,  for an undisclosed amount.

A Chicago-based private equity firm, Golden Vision Capital Americas, acquired the educational software company Hawkes Learning for an undisclosed amount. Hawkes created the first adaptive learning educational software with embedded expert systems – the precursor to AI. Their comprehensive suite of innovative course materials encompasses a wide range of subjects, including Mathematics, English, Science, Statistics, Business, and Humanities.

Babbel, a language learning platform, acquired the browser extension Toucan to further expand its learning ecosystem with a browser extension. The amount was not disclosed.

FullBloom, a provider of special education instruction and interventions, acquired a counseling support company, EmpowerU, for an undisclosed amount.

QuantaSing, the Beijing-based learning and development provider, acquired Kelly’s Education, a Hong Kong-based online learning platform. The amount wasn’t disclosed.

In August, Presence, a K-12 teletherapy company, acquired RemoteHQ’s software platform for an undisclosed amount.

Clearlake Capital-backed Discovery Education, a K-12 digital curriculum and learning services provider, agreed to purchase Dreambox Learning, an edtech provider of online software for math and reading education.

SchoolStatus, a K-12 communications company, acquired the school engagement platform ClassTag. The amount wasn’t disclosed.

Noodle, a higher ed enrollment and infrastructure growth company, acquired Meteor, a higher ed-focused upskilling company, for an undisclosed amount.

Ascent, an outcomes-based leading and student success company, acquired the professional development platform Ampersand for an undisclosed amount.

Sallie Mae, the student lender, acquired “key assets” of Scholly, a scholarship search app, for an undisclosed amount.

Student data validation software provider Level Data acquired GlimpseK12, a curriculum measurement tool. The purchase price was not disclosed.

Kahoot, the publicly traded company that developed the popular online quiz tool was acquired by Goldman Sachs’ Private Equity for $1.2 billion in an all-cash deal.

In July, Edtech giant PowerSchool announced that it plans to acquire SchoolMessenger, which offers a range of voice, text, and online tools to help K-12 schools notify parents and students, for approximately $300 million.

Newsela, a K-12 content platform, acquired the instruction and assessment platform Formative for an undisclosed amount.

In June, Axcel Learning, an education acquisition business with financial backing from Alpine Investors, acquired ExitCertified, an online training company focused on upskilling and reskilling individuals, teams, and organizations.

In May, Learneo, the company that owns CliffNotes, Course Hero, and Quillbot, acquired Barnes & Noble Digital Student Solutions for $20 million.

The learning management system, Go1 acquired the book summarizing subscription service Blinkist.

The University of Idaho announced last week that it intends to acquire the giant for-profit University of Phoenix, with 85,000 students, for $550 million.

Specialized Education Services, a K-12 services provider, acquired Illinois-based special education school NewHope Academy for an undisclosed amount.

Five Arrows, the alternative assets arm of Rothschild & Co., purchased  n2y, a provider of comprehensive, technology-powered solutions for students with unique learning challenges, from The Riverside Company, a private investor.

In April, Raptor Technologies, a K-12 school safety software provider, acquired SchoolPass, a cloud-based solutions provider. The amount was not disclosed.

In March, Renaissance, a preK–12 education technology provider, acquired GL Education, a provider of formative assessments for schools.

Class Technologies Inc., a virtual software provider, acquired CoSo Cloud, a digital learning company, for an undisclosed amount.

Five Arrows, the alternative assets arm of Rothschild & Co, has acquired n2y, a provider of education technology solutions for students with learning challenges.

Docebo, a corporate training and learning platform with AI capabilities, has acquired PeerBoard, a knowledge-sharing platform.

Brightwheel, an all-in-one early education platform, has acquired Experience Early Learning, a research-based early education curriculum provider.

Excolere Equity Partners acquired a controlling interest in EPS School Specialty, a leading developer of curriculum products and services that enhance literacy and math skills for K-12th grade students, particularly those who are two-plus years behind grade level.

Parchment, based in the US, acquired the higher-ed platform Quottly for an undisclosed amount.

Voxy, based in Great Britain, acquired language-learning startup Fluentify for an undisclosed amount.

Carnegie, a leading provider of innovative marketing and enrollment solutions in higher education, has completed two acquisitions. In January of this year, Carnegie acquired the National Small College Enrollment Conference (NSCEC), the leading conference dedicated to serving the needs of small colleges. And secondly, in March, Carnegie acquired CLARUS Corporation, a leading provider of digital marketing solutions for community and technical colleges.

Teaching Channel, a provider of online teacher education, has merged with Learners Edge and Insight ADVANCE. The terms were not disclosed.

Highlights for Children, publisher of a magazine for kids and other media, acquired Tinkergarten, which provides play-based outdoor learning experiences to children six months to 8 years old.

UWorld, which provides learning tools to help students prepare for high-stakes tests, has acquired Wiley’s Efficient Learning test prep portfolio.

Vasil Jaiani, a data management company executive, has acquired two interactive educational websites, Visual Fractions and Worksheet Genius.

XL Learning, a provider of a learning resources platform for K-12 students, acquired Teachers Pay Teachers, a marketplace for teachers to sell lesson materials to each other.

Savvas Learning Company acquired Whooo’s Reading, a gamified reading platform driven by AI, for an undisclosed amount.

Atairos, an investment company, agreed to acquire LifeLabs Learning, an edtech platform that provides upskilling programs for managers.

Bain Capital Double Impact, LP acquired Meteor Education, LLC, from Saw Mill Capital Partners. Meteor is the leading provider for the design, delivery, and implementation of modern environments for K-12 schools, operating at the intersection of learning environments and learning experiences.

TPG’s Rise Fund picked up a controlling stake in the Malaysia-based Asia Pacific University of Technology and Innovation in a deal worth $300 million.

Perdoceo, which owns Colorado Technical University and American InterContinental University System, acquired the software engineering bootcamp Coding Dojo for $53 million.

Tutoring provider Paper acquired the college-readiness tool MajorClarity. The terms of the deal were not announced.

The Riverside Company, a global private investor focused on the smaller end of the middle market, has invested in Eduthings, a software solutions provider for Career and Technical Education (CTE) administrators, teachers, and students to track outcomes and monitor overall program effectiveness. Eduthings is an add-on investment to Riverside’s platform, iCEV, a leading developer of SaaS-based digital curriculum, instructional materials, and industry certifications for the CTE market.

Riverside Company acquired Human Element Solutions, LLC (Element H), a provider of live events, video, creative, and digital content solutions that optimize audience engagement within the pharmaceutical, biotech, and medical device/diagnostic industries.

U.S. News & World Report acquired CollegeAdvisor.com, a college admissions platform, from NCSA College Recruiting. The amount was not disclosed.

Study.com, an online learning platform, acquired the tutoring company Enhanced Prep for an undisclosed amount.

Accelerate Learning, a K-12 STEM curriculum provider was acquired by Providence Equity Partners. The terms were not disclosed.

Imagine Learning, one of the largest digital curriculum providers acquired Winsor Learning, whose staff will join Imagine Learning. The acquisition was announced as part of a new push into special education. The amount was not disclosed.

MSB School Services, a K-12 special education software provider, was acquired by Craftsman Capital, a private equity firm, for an undisclosed amount.

Thesis, a cloud-based administration software system for higher ed, was acquired by the private equity firm SilverTree. The amount wasn’t disclosed.

The student engagement platform Learning Explorer acquired Mosaic, the assessment system from ACT. The amount wasn’t disclosed.

ParentSquare, a K-12 engagement platform developer, acquired Gabbart Communications, a school communications tool. The amount wasn’t disclosed.

Online program management company Noodle acquired the South African-based Hubble Studios, a digital content developer, for an undisclosed amount.

Edustaff, a K-12 staffing company, announced it received a non-controlling investment from the private equity firm Public Pension Capital.

We will update this post every two weeks as we close more deals in the education and edtech sectors and learn about other transactions.

Read our previous article for information about mergers and acquisitions deals in the education and edtech sectors that closed in 2002.

About the Author and Jackim Woods & Co.

Rich Jackim is an education industry investment banker, educational industry entrepreneur, and former mergers and acquisitions attorney.

For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.

Rich also founded a successful training and certification company called the Exit Planning Institute, which he sold to a private equity group in 2012.

Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.

Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.

If you own an education-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.

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Rich Jackim and Jackim Woods & Co are proud to partner with Educapital Foundation to create opportunities for underserved students to pursue career-focused higher education opportunities.  We do this by providing them with innovative scholarships and introducing them to schools and colleges that can help them break the poverty cycle by training them for high-paying, in-demand careers.

Overview of the Educapital Lead Generation Program

Who is Educapital Foundation?

Educapital Foundation is an innovative 501(c)3 nonprofit foundation(www.edu-capital.org). Educapital is the only national foundation to focus its efforts on trade school education for the country’s most underserved, impoverished students.

What Does Educapital Do?

Educapital Foundation partners with leading social media influencers nationwide to create scholarships for students and campaigns to promote career-focused higher education. In 2022, Educapital awarded 3,700 scholarships and grants to students who completed or were enrolled in Educapital’s partner school programs.

Why Does Educapital Do It?

Educapital’s mission is to eliminate poverty through education and access to capital.

How Does Educapital Generate Leads?

Educapital runs marketing campaigns with leading social media influencers that reach over 20 million social media followers each month.

Where Does Educapital Source its Leads?

Educapital sources its leads using innovative social media campaigns on Tiktok and Instagram, targeting low-income and underserved students ages 18-24.

Who Does Educapital Serve?

• Students seeking to improve their lives by:

– Increasing their awareness of and access to good-paying careers
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Tailored Approach: Educapital tailors its influencer marketing campaigns to fit the enrollment needs of its partner schools, including the program, target demographics, and geographical area.

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Educapital’s Unique Win-Win-Win Business Model

Educapital’s innovative business model is a unique example of creating a win-win-win scenario for everyone involved, from students to influencers and donors to career schools and colleges.

Students benefit from having a non-profit entity that is focused on helping them break the poverty cycle through a combination of scholarships, grants, mentoring, and introductions to careers colleges that fit their needs. All of the proceeds from selling leads are re-invested in Educapital’s student scholarship fund. Each student, on average, receives over $1,000 in scholarships from Educapital.

Influencers benefit by promoting a non-profit public-service message about the value and benefits of career education and being able to write off their typical fee as a donation to Educapital’s 501C3 foundation.

Corporate donors and employers benefit by promoting career education and funding scholarships for students in fields that directly benefit these donors.

Career colleges and schools benefit by getting a steady stream of qualified leads for their programs.  As an added benefit, when a lead generated by Educapital becomes a student and enrolls, they receive an Educapital-funded performance-based scholarship that helps the school or college’s 90/10 ratio.

Click Here to Read about Educapital Foundation in the News

To learn more and become a Partner School or Donor, contact

Rich Jackim
Jackim Woods & Co. rjackim@jackimwoods.com
Cell: 847-682-4997

Coding Bootcamp Acquisitions: 2014 to 2022

This article provides an overview of the publicly announced tech and coding bootcamp acquisitions since 2014.

This article includes the following sections

• Introduction
• Understanding the Bootcamp Market
• Valuing Coding & Cybersecurity Bootcamps
• 2022 Bootcamp Acquisitions
• 2021 Bootcamp Acquisitions
• 2020 Bootcamp Acquisitions
• Summary of Tech Bootcamp Acquisitions
• Notable Coding & Cybersecurity Bootcamp Acquisitions

Introduction

Since the first coding bootcamp acquisition in June 2014, we’ve seen dozens of coding bootcamps get acquired by a wide range of companies, from for-profit education companies (like Capella Education) to co-working companies (like WeWork) and other coding bootcamps (like Thinkful + Bloc)!

With rapid market growth in the bootcamp industry, other types of for-profit education companies are taking note, including traditional vocational schools and 4-year colleges and universities.

Many of these coding bootcamp acquisitions should come as no surprise. Some have been very successful, with the programs going on to significantly increase the number of physical locations and online course offerings.

In addition, as coding bootcamps mature, we are beginning to see bootcamps get acquired by well-known companies for increasingly large sums.  For example, General Assembly was acquired for $413 million, and Trilogy Education for $750 million!

As education industry specialists, Jackim Woods & Co maintains a list of bootcamps acquisitions to track who’s buying whom and how bootcamps and how edtech companies are valued.  As we were compiling the 2022 transactions, it occurred to us that others might be interested in this information as well, so we thought we’d share it with you.  We plan to update this list each year with publicly announced deals involving coding and cybersecurity bootcamps.

Understanding the Coding Bootcamp Market

If you are interested in learning more about the $2.3 billion tech bootcamp sector, please see our article Understanding the Tech Bootcamp Market.

Valuing Tech & Coding Bootcamps

If you’re interested in understanding how bootcamps are valued, please see our article How to Value a Bootcamp – Example and Multiples.

You might also enjoy reading our related article, How to Value an EdTech Company – Multiples & Example.

2022 Coding Bootcamp Acquisitions

2022 was a big year for tech boot camp dealmaking.

• 2022 started off with a bang when Skillsoft, an online course provider, acquired Codecademy in January for $525M.
• Then, in February, Centage Group acquired InfoSec, the leading provider of tech-related certification prep courses, for $190 million.
• The year also ended with two notable transactions when Digital Intelligence Systems acquired Grand Circus for an undisclosed amount, and Simplilearn (a Blackstone Group-backed company) acquired Fullstack Academy.  Fullstack Academy was estimated to be valued at $55 million.

2021 Coding Bootcamp Acquisitions

• ThriveDX (HackerU) acquired Cybint for a reported $50 million.
• Brainstation acquired Wyncode in January 2021
• SNHU acquired Kenzie Academy in March 2021.

2020 Coding Bootcamp Acquisitions 

• K12, the publicly traded online K-12 school and education management provider, paid $165 million in cash to buy Denver-based coding bootcamp Galvanize. For K12, the deal means adding more coding curricula for students in its Destinations Career Academies, which offers high school and career training program hybrids. For Galvanize—which is also Hack Reactor—the deal provides additional funding to grow its corporate learning business, add more physical locations, and increase its services to the military.
• K-12 acquired Tech Elevator for $24M
• Carrick Partners acquired Flatiron School from WeWork for an undisclosed amount.

Summary of Coding Bootcamp Acquisitions

The following is a summary of the publicly announced acquisitions of tech-related bootcamps since 2014.  Keep in mind that only large transactions are typically announced to the public.  We estimate that 75% of the bootcamp transactions each year are small and are not announced to the public.

 Notable Coding Bootcamp Acquisitions

The first reported acquisition of a coding bootcamp was Kaplan Test Prep’s purchase of Dev Bootcamp in June 2014. Although this was the first acquisition in the coding bootcamp industry, it wasn’t Kaplan’s first foray into coding bootcamps.  Kaplan launched its data science bootcamp Metis in early 2014. In 2017 Kaplan integrated Dev Bootcamp into Metis and retired the Dev Bootcamp brand.

Galvanize acquired Zipfian Academy in November 2014. Zipfian Academy was one of the first coding and networking bootcamps in the US. After one year of success, it was acquired by the Denver-based education & coworking powerhouse Galvanize.

ReactorCore acquired MakerSquare in January 2015. After ReactorCore was acquired by MakerSquare, ReactorCore’s first major move was to acquire Chicago-based mobile bootcamp Mobile Makers in September 2015.

The Iron Yard acquired Apollo Education as a “strategic investor” in July 2015. As of October 13, 2017, The Iron Yard is no longer operating.

Strategic Education, Inc. (SEI), the publicly traded holding company for Strayer Education, Inc., acquired New York Code & Design Academy in January 2016. New York Code & Design Academy is no longer operated as a separate brand.

Capella Education acquired Hackbright Academy in April 2016 and shortly afterward acquired DevMountain. Capella Education was later acquired by SEI.

WeWork acquired Flatiron School in October 2017, then in May 2018, WeWork also acquired MissionU.

A few months later, Flatiron School (now a part of WeWork) acquired the UX design bootcamp, Designation, and the cybersecurity bootcamp, SecureSet Academy.

After growing too quickly and facing financial challenges, WeWork sold off most of its assets, including selling Flatiron School to Carrick Partners in June 2020.

In a classic roll-up strategy, Thinkful began acquiring several of its smaller competitors to boost its value.  Starting in 2017, Thinkful acquired Viking Code School and The Odin Project. Then, in April 2018, they acquired Bloc.  When Thinkful reached its desired valuation, it sold to Chegg for $100 million.

Adecco, the large tech staffing company, acquired General Assembly in April 2018 for $413 million. According to Axios, General Assembly had been valued at $440 million. Between 2011-2015, General Assembly raised approximately $120 million in VC funding and earned $100 million in revenue in 2017.  That was the largest bootcamp deal at that time.

However, two years later, 2U acquired Trilogy Education in April 2019 for a record-breaking $750 million!

In early 2022, Centage Group acquired InfoSec, the leading provider of tech-related certification prep courses, for $179 million.

Toward the end of 2022, IT staffing provider Digital Intelligence Systems LLC (Disys) acquired Grand Circus, a virtual coding bootcamp provider that also connects talent to employers.

Outlook for Coding Bootcamp Acquisitions

Many industry analysts are pessimistic about the future of coding bootcamps because of the rapid advances in artificial intelligence and the ability of AI to write relatively sophisticated code.  We do not share that pessimism.  AI will still need talented coders to break projects down into the components that an AI can handle, then direct and instruct the AI about the project parameters, and finally review the AI’s work product and make necessary tweaks and adjustments.  So rather than reducing the demand for programmers, we expect the nature of the course to change and evolve as the technology sector changes and evolves.

About the Author and Jackim Woods & Co.

Rich Jackim is an education industry investment banker, educational industry entrepreneur, and former mergers and acquisitions attorney.

For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.

Rich also founded a successful training and certification company called the Exit Planning Institute which he sold to a private equity group in 2012.

Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.

Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging in value from less than one million to more than eighty million dollars.

If you own a tech boot camp or another education-related business and would like to explore your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.

Mergers and Acquisitions in the Education Industry in 2022

This post provides an overview of mergers and acquisitions activity in the education and edtech sectors in 2022

The education sector took some significant twists and turns when the COVID-19 pandemic changed the world. We saw a surge of new users, and new tools, around online learning; but we also saw people and organizations in 2020 and 2021 rethinking how to get the best out of learning environments overall. Now that COVID is largely behind us, 2022 is a year to take stock of how different education related companies evolved and grown.

McGraw Hill acquired Boards & Beyond, a provider of on-demand video libraries and comprehensive online resources for medical students, for an undisclosed amount.

Global University Systems acquired FutureLearn for an undisclosed amount.

GoStudent acquired Studienkreis for an undisclosed amount. This is GoStudent’s 4th acquisition.

The Riverside Company, a private equity group, acquired Applied Educational Systems (AES), a provider of digital career and technical education content for K-12 schools and career centers. AES is an add-on to Riverside’s iCEV platform, a leading developer of SaaS-based digital curriculum, instructional materials and industry certifications.

Universal Technical Institute, a provider of vocational education and  skilled trades programs, acquired healthcare-related higher ed provider, Concorde Career Colleges, Inc., for $50 million.  Concorde Career Colleges has 16 brick and mortar campuses and roughly 11,200 enrolled students in its allied-healthcare programs.

Solutions provider Follett School Solutions acquired the library management system Access-It Software Ltd.

Apogee, a company that offers technology services for higher ed, acquired Cumulus Technology Services, a cloud services consultancy.

The education communications and analytics provider SchoolStatus acquired Smore, a Tel Aviv-based K-12 email newsletter provider that’s widely used in the U.S.

Publisher McGraw Hill acquired the on-demand video library for medical students, Ryan Medical Education, LLC d/b/a Boards and Beyond. The amount was not disclosed.

As mentioned above, London-based FutureLearn was acquired by Global University Systems, a global for-profit higher ed provider based in the Netherlands.

California-based Mattel, one of the biggest toy sellers in the world, acquired Caribu, a digital reading app for families, for an undisclosed amount.

Higher education solutions provider Top Hat acquired STEM learning platform Aktiv Learning.

University Headquarters acquired Discover Early Childhood EDU, an informational guide about degree offerings.

BiC, one of the world’s biggest pen sellers, acquired Advanced Magnetic Interaction, a company that’s focused on “augmented” human-computer interaction.

Learnsoft, a learning management system provider, raised $16.7 million in Series A funding led by Elsewhere Partners.

Discovery Education, a digital edtech platform provider, acquired Pivot Interactive, which has a library of interactive educational science videos. Discovery has private equity backing from Clearlake Capital, and it also acquired DoodleLearning earlier in the month.

EarlyDay, an early childcare education career marketplace, raised $3.25 million.

The children’s publisher Scholastic acquired Learning Ovations, which runs a literary assessment and instructional system.

Edlio, a K-12 communications technology company, acquired SchoolInfo, a mobile app creator for schools.

LumiQ, a Canada-based company that runs a podcast for training chartered professional accountants, raised $5 million for expansion in the U.S.

Roper Technologies, Inc., announced it has reached an agreement to acquire the school administration software provider Frontline Education in a transaction valued at $3.725 billion.

Akili Interactive, which is developing a video game treatment for pediatric ADHD, raised $163 million in a merger with the special purpose acquisition company (SPAC) Social Capital Suvretta Holdings Corp.

Upkid, an on-demand marketplace for childcare centers and teachers, raised $1.7 million in a pre-seed round.

Outcome Group, Inc., an education financing company, announced it has received new debt facility from Variant Investments, LLC, to expand its education portfolio.

Alchemy, a Web3 developer, acquired ChainShot, a coding bootcamp company, for an undisclosed amount.

Renaissance Learning, an educational software services company, acquired Illuminate Education for an undisclosed amount, according to an email sent to Illuminate customers.

Discovery Education, a digital learning platform, acquired the UK-based math and language arts product provider DoodleLearning for an undisclosed amount.

Vsauce’s Curiosity Box subscription service was acquired by science subscription provider MEL Science. It reportedly closed for $12 million.

The future-of-learning private equity firm Achieve Partners acquired Helios Consulting, a certified Workday advisory partner, to build out its apprenticeship programs.

Cybrary, a cybersecurity and IT career development company, raised $25 million in Series B funding.

Territorium, a skill acquisition edtech company, closed $4.4 million in seed funding.

Creative Galileo, an early learning platform, raised $7.5 million in Series A funding.

Pearl, leading research backed, all-in-one tutor management platform, announced its seed fundraising has passed $4 million.

Arist, a microlearning platform, raised $12 million in Series A funding.

APDS, a public-benefit corporation whose advanced career readiness platform offers career training to incarcerated people, raised $7 million in Series C funding.

Class Technologies announced it has closed its acquisition of Blackboard Collaborate.

Kangarootime, an early childhood education software management company based in Buffalo, NY, closed $26 million in Series B funding.

Coding Dojo, a coding boot camp company, raised $10 million. The Bellevue, Washington-based organization trains software engineers both in-person and online and has experienced more than 100% year-over-year growth over the last two years.

upGrad, a Mumbai-based “unicorn” and test-prep company, doubled its valuation after a $225 million funding round. It’s now valued around $2.25 billion. The nonprofit Educational Testing Service was involved in the funding round.

Elevate K-12, the leading provider of high-quality live-streaming instruction for US K-12 classrooms, raised a Series C $40M round of funding led by venture capital firm General Catalyst.

Velocity Career Labs, a startup that wants to create a blockchain-based platform to manage employee’s credentials, raised $6.5 million in funding.

Multiverse, an apprenticeship facilitator, founded in London and now co-headquartered also in New York — has closed a Series D of $220 million, with its post-money valuation coming in at $1.7 billion. StepStone Group (not to be confused with recruiting platform StepStone) and previous backers Lightspeed Venture Partners and General Catalyst all co-led this round, with Founders Circle Capital and past backers Audacious Ventures, BOND, D1 Capital Partners, GV and Index Ventures also participating.

Cambly, a language learning app, raised $60 million in Series B funding, which is encouraging because language learning apps are a rarity in the VC-backed consumer tech space because they have struggled to make money.

Prenda, a K-8 micro-school company, announced a $20 million Series B funding round. The Series B is being led by Seven Seven Six (776), Alexis Ohanian’s firm, with strong participation from edtech-focused VC Learn Capital, Modern Venture Partners, Peak State Ventures, and the companies original angel investors also participating.

Achieve Partners acquired a majority stake in Boclips, a company that curates educational videos.  Boclips works with publishers and education providers worldwide to enrich learning with the world’s best educational videos and podcasts. Boclips is the trusted destination for rich media that are vetted for quality, sourced from leading creators, and curated specifically for education.  Achieve Partners is engineering the future of learning and earning by investing in cutting edge technologies and novel business models to bolster skill development and secure the future of work for millions of Americans.

IXL Learning, a learning platform company, acquired Curiosity Media, which develops language learning services.

BibliU, a learning platform, announced it has raised $15 million in funding. All existing institutional Series A investors – Stonehage Fleming, Oxford Science Enterprises, Guinness Ventures, and Nesta Impact Investments – participated in the round.

Beable Education, an online literacy recovery platform, acquired Readorium, a leading provider of educational software that teaches reading comprehension skills through science text differentiated to students’ reading levels.

Go1, a hub of on-demand corporate training resources, announced that it raised more than $100 million in a new round of funding, bringing its total market valuation to over $2 billion.  The funding was co-led by AirTree Ventures and Five Sigma, with SoftBank Vision Fund 2, Salesforce Ventures, Blue Cloud Ventures, Larsen Ventures, Scott Shleifer and John Curtius from Tiger Global, TEN13, M12 (Microsoft’s venture fund), Madrona Venture Group, SEEK and Y Combinator also participating.

Riverside Insights, a leading developer of research-based assessments and analytics, today announced its acquisition of Aperture Education, the leading provider of research-based social and emotional learning (SEL) assessments for K-12 schools. With more than 65 years of combined research and SEL experience, Aperture sets the standard for research-based SEL assessment solutions.

Elsevier, a global leader in research publishing and information analytics and part of RELX, has closed the acquisition of Interfolio, a provider of advanced faculty information solutions for higher education, headquartered in Washington DC, US. For over 20 years, Interfolio has supported academics, researchers, higher education institutions and funders. Interfolio’s portfolio includes Faculty Information System (FIS), Dossier, and Researchfish.

India-based startup PW, or PhysicsWallah, has raised $100 million in its Series A funding, the profitable startup said Tuesday. Westbridge and GSV Ventures financed the startup’s first institutional round, which values the two-year-old firm at $1.1 billion (post-money). The company offers low-cost education classes. According to the company’s CEO, “The firm has been profitable since inception with positive cash flow and reserves.”

Guild Education, which provides and manages education-as-a-benefit programs for employers, raised $175 million in a Series F funding round. The round was led by Wellington Management, with participation from Oprah Winfrey, Bon Secours Mercy Health, Citi Impact Fund, and existing investors. The latest funding brings the Denver-based company’s total valuation to $4.4 billion.

About the Author and Jackim Woods & Co.

Rich Jackim is an education industry investment banker, educational industry entrepreneur, and former mergers and acquisitions attorney.

For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.

Rich also founded a successful training and certification company called the Exit Planning Institute which he sold to a private equity group in 2012.

Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.

Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.

If you own an education-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.

How to Value an EdTech Company: Multiples & Example

One of the hardest things to do when building an EdTech business is determining its value. Whether you are seeking growth capital or looking to exit, you need to have a basic idea of what your business is worth.  If you value your business too high, investors won’t be willing to speak with you.  If you value it too low, you leave money on the table or end up giving away too much equity to raise the growth capital you need. So, how do you calculate a reasonable value for your EdTech company?

Well, the valuation methodology outlined below applies to all EdTech companies, regardless of when you are pre-revenue, established, or looking to exit.

How to Value an Edtech Company: Multiples & Example

The global Edtech industry is expected to reach a market value of over $340 billion by 2025. Because of strong underlying market trends, the Edtech sector has received some of the highest tech valuations, with publicly traded EdTech companies trading at 5.0x to 18x  next twelve months’ revenue (NTM)!  These valuations dropped significantly in late 2021 and early 2022, but are expected to rebound.  See our article on EdTech multiples.

If you are the founder of an EdTech company and are thinking of raising a round of growth capital, you’re at the right place. In this article, I’ll provide a step-by-step guide on valuing any Edtech company.

First and foremost, it’s important to understand that EdTech companies are not valued like traditional businesses. Valuations of conventional businesses are based on the company’s free cash flow. With EdTech companies, the most common valuation method is what’s referred to as the Venture Capital approach, which values companies based on a multiple of revenues.

In this article, we’ll use publicly-traded companies in the Edtech industry for comps so you can follow along and use them to value your EdTech business.

Note: If you need help preparing a pitch book for investors, contact us to learn how we can help you prepare a solid Edtech pitch book that will significantly increase the odds of a successful capital raise.

Venture Capital Edtech Valuation Method

There are several startup and early-stage valuation methodologies. While none of them is perfect, they all try to estimate a valuation for a business based on several qualitative and quantitative factors. The Venture Capital Valuation Method is the most common method investors use to value Edtech companies.

The VC method considers business fundaments, market demand, and investor return on investment factors.

Why Do Investors Use the Venture Capital Method to Value an EdTech Company?

The VC method is a relatively simple and straightforward way to value an early-stage EdTech company because it is driven by several factors that can be grouped into 4 categories.

1. Market Demand

Your EdTech company will be more valuable if you demonstrate that it is part of a large, highly fragmented market that is growing at double or triple digits.

2. Market Fit & Adoption

Your EdTech company will be more valuable to investors if you prove that the business has early adopters or users (market-fit) and that people are willing to pay for your service (adoption.)

3. Management Team & Track Record

Your Edtech company will be more valuable to investors if you demonstrate that your management team has relevant sector experience and a successful track record of growing similar businesses.

4. Investor’s Expectations & Founder’s Negotiating Power

Last but not least, keep in mind that investors are willing to back EdTech startups and early-stage companies because they can earn a substantial return on their investment. If a startup is deemed too expensive, it reduces an investor’s return on investment, and they won’t invest.

At the same time, the more investors you can pitch to and the more term sheets you receive, the better your negotiating position and the higher the valuation.

The Three Value Drivers When Valuing an EdTech Company

The VC method allows founders and investors to estimate an EdTech company’s value by inputting three main variables:

1. Projected Revenues

Projected revenues are usually based on an integrated financial model that includes projected revenue for the next five years. Keep in mind that unless your financial model, and the assumptions that drive it, are supported by facts and hard data, investors will take them with a grain of salt. So it’s important to work with an independent, objective financial advisor who can help you develop a rock-solid set of projections.

2. Comparable Industry Valuation Multiples

Investors rely heavily on valuation multiples from comparable companies within the same industry and sector. The most common multiple used is EV/Revenue, which stands for Enterprise Value as a multiple of Revenue. See below for 2022 public Edtech company valuation multiples.

These multiples change daily and are sensitive to many variables, including interest rates, stock market performance, IPO results, M&A activity, market demand, etc.

3. Investors’ Required IRR

The other important variable is the rate of return investors are looking for. An investor’s required IRR (“Internal Rate of Return”) depends on the type of investor, the EdTech company’s stage, and the investment’s perceived risk. The higher the perceived risk, the higher the required IRR. For example, an investor would need a higher IRR for a seed money investment in an EdTech startup than for an investment in an early-stage EdTech company looking for a Series A or Series B round of financing.

Edtech Valuation Example

Now that we’ve covered how the Venture Capital valuation method works let’s see how to use it to value an early-stage Edtech company looking to do a Series A capital raise.

Prove Market Fit & Adoption

The first thing to do is create a detailed, integrated financial model that includes historical financial data and operating metrics. This is important because your historical performance will prove market fit & adoption and support the assumptions you use to create your projections.

Expected Revenues

The next step is to create detailed revenue and expense projections for five years. While the valuation is based on a multiple of revenues, it’s also important to know your operating and growth assumptions to determine how much capital you need to raise to hit your revenue targets.

Need help building an integrated financial model and projections? Contact us for a free, no-obligation consultation.

So, for this example, let’s assume your EdTech company is in the K12 reading sector. You’ve been in business for three years and have been funded by personal funds and friends and family investors. Your business now has 450 subscribers and is generating $250,000 in revenue, and your subscriber base grew by 100% last year. You built an integrated financial model with historical results and projected revenue for the next 5 years. The projections show that next year you expect revenues to be $625K and grow to $4.1 million in Year 5.

Below is a very basic example of projected revenues for the next five years.

Public EdTech Valuation Multiples

The next step is determining the right multiple to use to value your business.

Investors track over a dozen publicly traded Edtech companies to gauge the market’s appetite for EdTech investments.

While the multiples vary a lot from company to company, each is based on investors’ assessments of the company’s market demand, business model, management team, growth rate, and profitability.

Below is a sample of some of the public EdTech companies we track.  Be sure to read this excellent article from the venture capital group, GSV Ventures regarding the valuation of publicly traded EdTech companies.

In our example of the VC valuation method, we will use the Sector Average EV/Revenue multiple of 4.0.

Keep in mind that when preparing a valuation of your EdTech company, it’s important to select the comparable companies that are the most like the company you are trying to value. That won’t always be possible, but to support your valuation, you’ll need to explain to investors why you selected the comparable companies you picked rather than others.

Adjusting the Multiple for a Private EdTech Company

Because we started with valuation multiples from public companies, we need to adjust that multiple to reflect that your EdTech company is privately owned. Privately owned companies are less valuable than publicly traded companies because they are much more difficult, time-consuming, and expensive to sell. As a result, investors apply an Illiquidity Discount, also referred to as a Discount for Lack of Marketability, of between 20% and 30%.

Let’s use a 25% discount, which results in an adjusted EV/Revenue multiple of 3.0x.

Determining Your Exit Value

The next step in the VC Method is to calculate your EdTech company’s value when your investors exit. In this example, we assumed the exit would be after five years. This is called the Exit Value.

Exit Value = EV/Revenue x Revenue at exit (Year 5)

Year 5 Revenue = $4.1 million

EV/Revenue Multiple = 3.0x

Exit Value = 3.0x x $4.1 million

Exit Value = $12.3 million

Investors’ Required Rate of Return (IRR)

The next step is determining the return on investment your investors will seek. The internal rate of return (IRR) required by investors will vary depending on the investor, the stage of the EdTech company they’re investing in (early-stage deals require higher returns than later-stage deals), and the industry trends.

Based on our experience, VCs typically look for a 40-60% IRR on the companies they invest in. Over the last few years, venture capital firms, on average, have generated a 19.8% IRR. Keep in mind that this is an average, so it includes their failed deals (the ones that went wrong) as well as their success stories. They look for a 40%-60% IRR because providing venture capital is a high-risk business, and an estimated 80% of the deals they invest in are unsuccessful or don’t live up to expectations.

In this example, I’ll use 40%IRR as a low-end and 60% IRR at the high-end expected rate of return.

Keep in mind that as your EdTech venture becomes more proven and successful, the perceived risk of the investment goes down, so investors will be willing to accept a lower IRR.

Calculating Your Post-Money Valuation

The next step is to calculate your Post-Money value. Let’s assume you are looking to do a Series A capital raise, so we will also assume investors will require a 40-60% IRR over the next five years.

Using these IRR assumptions, we discount the Exit Value back to its present-day value to estimate the post-money valuation of your business. The post-money valuation is your EdTech company’s value after receiving the infusion of capital. In contrast, a pre-money valuation is the value of your EdTech company as it is today, without the injection of capital.

Post-money valuation = Exit Value / (1 + IRR)^5

Post-Money Value = $12.3 million/(1 + 40%)^5 = $2,287,865

This is the high end of the post-money valuation range, based on the lowest expected rate of return.

To calculate the low end of the post-money valuation range, use the highest expected rate of return.

Post-Money Value = $12.3 million/(1 + 60%)^5 = $1,173,466

This means the post money value of your early-stage EdTech company is between $2.3 million to $1.2 million.

It’s interesting to note that while we calculated the Exit Value using a 4.6x multiple (from the publicly traded EdTech companies), the EV/Revenue multiple for your early-stage EdTech company is much higher and between 4.7 and 9.2 times your current revenues of $250,000.

Getting the Best Terms

Finally, remember that the post-money valuation arrived at above is for 100% of your business. When doing a capital raise, it’s important to raise as much capital as possible while giving up as little equity as possible in exchange.

To get the best terms from potential investors without giving up all your equity, your integrated financial model must include an accurate estimate of your operating expenses so you can figure out exactly how much capital you need.

If your projections show that you need $1 million in growth capital, you may be able to raise the capital you need and only give up 44% of the equity in your company ($1M/$2.3M=44%) in exchange.

The other important this you can do to limit the amount of equity you give to investors is to work with an experienced investment banker. An investment banker who knows the education space can help you build a compelling investment deck, create an integrated financial model backed by solid assumptions, and introduce you to more investors. The more investors you speak with and the more term sheets you receive, the better terms you’ll get.

 About the Author and Jackim Woods & Co.

Rich Jackim is an education industry investment banker and educational industry entrepreneur, and former mergers and acquisitions attorney.

For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.

Rich also founded a successful training and certification company called the Exit Planning Institute which he sold to a private equity group in 2012.

Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.

Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.

If you own an education-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.

Valuations for Title IV Schools and Training Companies at Record Highs

Valuations for vocational schools and training companies are at record highs now.  As business performance rebounds, buyers are competing for strong performing businesses. That has led to an increase in the number of education-related businesses that were sold in Q3 of 2021.  The number of education deals that closed in the third quarter increased 17% over the previous quarter, and 11% from the same quarter in 2020, according to Jackim Woods & Co, which tracks and analyzes vocational school and training company sale transactions.

2021 Education Industry Seller Confidence Index

Valuations for vocational schools and training companies are at record highs now because seller confidence is up.  As the economy rebounds, owners of vocational schools and training companies are returning to the market, feeling more confident they can sell their schools and training companies for a good price and less willing to wait until the COVID pandemic is over. Seller confidence increased to 57 out of 70; that’s up from 45 in 2020.  This is the highest seller confidence level since the high of 58 in 2018. Today 49% of the respondents believe they can receive a higher sale price for their school or training company today compared to a year ago, and 46% of respondents said the top factor motivating their confidence was an improvement in enrollment and revenue.

The average revenue for vocational schools and training businesses that were sold in the third quarter was $755,000, up 6% from the same time last year. Meanwhile, buyers of education-related businesses, especially Title IV schools, are paying record-high prices for businesses that performed well during the pandemic. The average sale price in the third quarter hit a new high of $1,780,000; that’s 17% higher than the previous year and 40% above pre-pandemic levels.

With current valuations above where they were pre-pandemic, many school owners are thinking now may be the right time to exit.

2021 Education Industry Buyer Confidence Index

Valuations for vocational schools and training companies are also at record highs because buyer confidence is up.  Buyers noted that there is a limited supply of profitable well-run schools and training businesses on the market.  In addition, several buyers noted that because of the shift to online learning, schools will be able to expand their geographic reach while reducing the cost of delivering educational services.  The combination of these two factors signals significant growth opportunities and higher margins for well-run schools and training companies in the future.   As a result, buyer confidence increased to 60, up significantly from 48 in 2020 and only slightly above the buyer confidence level of 59 in 2018.

It is interesting to note that demand for high-performing vocational schools and training businesses is increasing. According to Rich Jackim, Managing Partner of Jackim Woods & Co., “buyer inquiries on our education-related listings are up 39% since the same time last year.  However, many business owners are putting off selling until their schools or training companies have fully recovered, so the supply of profitable, well-run schools is still limited.  This is driving up values and makes it a sellers’ market.”

If you are beginning to think about selling your training business or Title IV vocational school and would like to explore your options, please contact Rich Jackim at rjackim@jackimwoods.com for a FREE, confidential, no-obligation consultation.

Number of Acquisitions in Education Sector Soars in 2021

The total value of mergers and acquisitions in the education sector increased by more than 50% from the second half of 2020 to the second half of 2021, as companies across the industry rushed to add education-related companies to their portfolios, according to a report by mergers and acquisitions advisory firm, Jackim Woods & Co.

Jackim Woods & Co. is a mergers and acquisitions firm that provides advice and financial consulting to middle-market companies in the education sector.

The overall number of individual M&A transactions also rebounded to pre-pandemic levels.

Buyers of education companies closed 210 mergers in the first half of 2020, and 240 acquisitions during the first six months of 2021.

The total value of acquisitions in the education sector between January and June was $19.4 billion, largely driven by Platinum Equity’s $6.4-billion acquisition of McGraw Hill, the report noted.

The market value of deals closed during the first half of 2021 had almost as much market value as all the deals closed during all of 2020.
Private equity-sponsored transactions accounted for 40% of deals during the first six months of 2021. That’s 8% higher than the average number of private equity-backed deals for the last three years.

According to Jackim Woods & Co, 97 of the 240 deals during this time frame were sponsored or financed by financial investors like private equity, venture capital, or other investment firms. That’s the highest number in three years and a 130% increase over the first half of 2020.

Twelve deals during the first half of 2020 had purchase prices of more than $100 million, and at least seven of those involved the K-12 sector. About 33% of the deals had purchase prices of between $4.5 million and $54.6 million.

The K-12 EdTeh segment surpassed the professional training services sector as the education industry’s most active market segment in the first half of 2021.
Approximately 50 deals involved the acquisition of professional training companies in the second half of 2019 and about 45 deals covered professional training services in the first half of 2021. There were approximately 40 deals in the K-12 EdTech segment in the second half of 2020, while nearly 60 deals closed in that segment in the first half of 2021.

For other segments of the education sector, the analysis showed a mixed picture of market activity for the first six months of this year compared to the second half of 2020.

The number of deals in the childcare services and higher-education EdTech segments increased during this period, but the number of deals in professional training technology, higher-ed institutions (including Title IV vocational schools), and K-20 services decreased. Deals involving for-profit K-12 schools remained stable.

According to Rich Jackim, Managing Partner of Jackim Woods & Co, “we are seeing strong demand for Title IV vocational schools that prepare students for careers in the healthcare professions.  We’re also seeing strong demand for non-Title IV schools, like commercial driving schools and cybersecurity and programming schools.  Valuations for these schools have increased significantly over the last 24 months.”

In addition to the McGraw Hill acquisition, the most interesting education sector deals in the first half of 2021 included

• Byju’s $900 million acquisition of Indian tutoring company Aakash Educational Services
• Renaissance’s $650 million acquisition of Nearpod
• Kahoot’s $435 million acquisition of K-12 secure-sign-on provider Clever

If you own an education-related business, including a Title IV college or vocational school, a k-12 proprietary school, or an EdTech company and are beginning to think about selling, we would be delighted to speak with you and help you explore your options.

Contact Rich Jackim, Managing Partner of Jackim Woods & Co at 224-513-5142 or rjackim@jackimwoods.com.

Education Industry Acquisitions Decrease in 2020 Due to COVID Concerns

Fueled by a multi-billion-dollar deal, the value of mergers and acquisitions in the education sector increased by more than 80% in the first half of 2020, even though the number of transactions dropped to a 30-month low, a new report by Jackim Woods & Co finds.

Overall, the market value of deals in the education sector increased from $4.9 billion in the first half of 2019 to $9 billion during the same period in 2020, according to research by the mergers and acquisitions firm, Jackim Woods & Co.

Jackim Woods & Co is an investment banking firm that provides advice and financial consulting to middle-market companies in the education sector.

Their analysis tracked 1,128 education sector deals between 2018 and June 2020.

Sixty-six percent of that total came from Blackstone’s $6 billion acquisition of student housing company iQ Student Accommodation, which has been described as the largest-ever private real estate deal in the United Kingdom.

Meanwhile, overall dealmaking activity in the education sector slowed significantly due to COVID-19 shutdowns and concerns about the long-term impact it would have on the sector. Jackim Woods & Co tracked 207 mergers and acquisitions in the education sector during the first six months of the year, down from 242 during the same period last year.

That figure also represents the fewest number of total deals for a six-month stretch since at least the beginning of 2018, the period covered in the report by Jackim Woods & Co.

The overall dip in the number of mergers and acquisitions during the first half of 2020 was due to a steep decline in private equity sponsored deals. According to Rich Jackim, Managing Partner at Jackim Woods & Co, only 41 of the 207 deals closed during the first six months of 2020 were financed by private equity firms or other financial investors. That’s the lowest number of deals closed in the 30-month period the report covered and a 50% decrease compared to the same period in 2019.
Only seven deals in the first six months of 2020 were valued at more than $100 million, and at least two were in the K-12 sector. About 33% of the total transactions had values in the range of $4.5 million to $54.6 million.

The sector of the education industry that saw the most activity in the first half of 2020 was the professional training services category, which rose from 44 to 60 transactions. That accounted for nearly 30% of all deals during the first six months and marked the most transactions closed for the sector since 2018.

Activity in almost every other segment of the education industry tracked by Jackim Woods & Co — aside from the professional training sector — was down compared to the first half of 2019, according to the report. That includes sectors specific to K-12 institutions and the K-12 EdTech space, which includes companies that provide media and software used in schools.

The most interesting K-12 deals during 2020 include
• China Maple Leaf Education System’s $487 million acquisition of Singapore’s Canadian International School;
• K12 Inc.’s $165 million acquisition of Galvanize, a Denver-based company that offers coding boot camp programs; and
• Chegg’s $96 million acquisition of the math problem-solving app Mathway.

If you own an education-related business, including a Title IV vocational school, K-12 school, or EdTech company, and are thinking about selling, we would be delighted to speak with you and help you explore your options.

Contact Rich Jackim, Managing Partner of Jackim Woods & Co at 224-513-5142 or at rjackim@jackimwoods.com.

Private Equity Buyers Are Busy In Education Sector

Private equity investors have shown strong interest in education-focused companies in the last few years, and not just in edtech companies. Several things are responsible for this renewed interest.

• For the last 10 years, digital transformations in the classroom have caused the ed-tech market to soar and have led to an increased interest in all types of education-related investments.
• The U.S. faces a significant skill shortage across the board as our population gets older and as our society emphasizes professional careers over skilled-based careers. This had led to severe shortages in healthcare, the trades, and transportation.
• Approximately 30% of for-profit career colleges or vocational schools went out of business between 2008 and 2016, removing excess capacity from the post-secondary landscape, which led to a resurgence of interest from private equity groups.
• For the last four years, both the Republican administration and the Democratic Congress supported private education, which resulted in an upsurge in funding by federal, state, and local governments.

On top of that, the education industry is very fragmented, with many early childhood centers, career colleges, and training companies still owned by individuals, leaving private equity firms a lot of room for roll-ups to consolidate the industry and realize significant economies of scale.

In addition, the K-12 market has become more complicated, with new technologies rapidly changing the game. So having the right people in charge who know how to design and implement digital learning platforms is increasingly important, representing a unique opportunity for private equity and other tech-savvy investors.  As a result, buyers and investors are spending more and more time developing world-class management teams to ensure their portfolio companies can provide teachers and students with the digital platforms and technical support they need to succeed.

For the past decade or so, buyers have been hesitant to invest in post-secondary education companies — ever since the Great Recession and implementing the Gainful Employment Rule during the Obama administration.  However, things have turned around completely in the last four years for several reasons, including…

• Over 200 poorly run for-profit career colleges closed their doors before the 2017-18 academic year — continuing a long downward trend. But happily, at the well-run schools that survived, enrollment and revenue are rising again.
• The regulatory environment is more favorable because the Gainful Employment Rule has been greatly scaled back – even though it remains on the books for now.
• Most for-profit career schools are demonstrating better results regarding educational outcomes like gainful employment, making them more appealing to investors no matter the level of regulatory oversight.
• The education sector tends to do well in a recession.  In general, post-secondary education does well when the economy slows down and unemployed people go back to schools, so education-related companies are a good hedge against recession in any investor’s portfolio.
• Valuations of early childhood centers, K-12 schools, and career colleges remain reasonable compared to other education sub-sectors like edtech.
• It isn’t just investors who’re interested in this space – lenders have returned as well. For example, Renovus Capital financed the Rasmussen acquisition with SunTrust, CIBC, and Bank of Ireland.  NCK Capital financed its purchase of Tricoci in partnership with Greyrock Capital Group and NBH Bank.

That’s all good news for owners of education-related companies.  Here are just a few of the deals in the education sector over the last few years —

• The Learning Experience, was purchased by Golden Gate Capital Partners Group-backed KinderCare Education, acquired Troy, Michigan-based Rainbow Child Care Center from Quad-C Management.
• Rasmussen College, a healthcare-focused career college system with 10,000 students across 22 campuses, was acquired by Renovus Capital Partners.
• The University of St. Augustine was acquired by Toronto’s Altas Partners in a deal worth $400 million.
• Allied Business Schools, which offers online real estate certification classes, was acquired by Colibri Group and Quad-C Management.
• Chicago-based Tricoci University of Beauty Culture was acquired by Dallas’s NCK Capital.
• Texas County Technical College in Houston, Missouri, was acquired by Arizona College.
• The National Business Institute of Florida was acquired by a private investor.

If you own an early childhood center, a Title IV career college, or a corporate training program and are interested in potentially selling, contact us at 224-513-5142 for a free, confidential, no-obligation discussion about the current market and your options.

About the author: Rich Jackim, the managing partner of Jackim Woods & Co, is an experienced M&A attorney, investment banker, business broker who has sold over 100 businesses.  He is also an education sector entrepreneur who founded and sold a professional training company, so he understands the industry and the sales process from both an owner and a buyer’s perspective. If you are thinking of selling your early childhood center, K-12 school, career college, or training program, he would be happy to speak with you.  His direct dial number is 224-513-5142, and his email is rjackim@jackimwoods.com.

Jackim Woods & Co Advises School Health on Acquisition of Palos Sports

HANOVER PARK, IL – School Health Corporation announced today that it has acquired Palos Sports, Inc., based in Alsip, IL. For over 60 years Palos Sports has been a leading distributor of physical education supplies to school districts, park districts, and Special Olympics programs throughout the United States. Educators and recreational groups look to Palos Sports for innovative sports, recreation and physical fitness products and equipment, as well as for curricula and knowledge to make their programs more impactful and successful.

School Health is the leading national provider of health supplies, services and solutions, serving professionals in educational settings in the fields of Sports Medicine, Health Services, Special Education and Early Childhood. With over 20,000 physical education, recreation and athletic items in stock, Palos Sports’ products and customers complement School Health’s offerings.

“Together, School Health and Palos Sports will boast the nation’s largest offering of health and wellness products to the education market in the areas of Physical Education, Sports Medicine, Health Services, Special Education and Early Childhood,” said Rob Rogers, President, School Health Corporation. “We both seek to improve the health and well-being of students in schools across America. We are pleased that Palos Sports is now part of the School Health family.”

“Palos Sports is a perfect addition to our offerings given that physical education is playing an ever-important role in helping students maximize their learning potential,” said Scott Cormack, Executive Vice President of Business Development and Strategy, School Health Corporation.

School Health Corporation will maintain Palos Sports as a separate company which will continue to operate in Palos’ current facility, supported by Palos’ dedicated employees who will join the School Health organization. The company will operate under the name Palos Sports, a School Health company.  Dan Dunne will continue as president of Palos Sports.

We are very excited to be a part of the School Health team,” said Dan Dunne, President, Palos Sports. “Our team is proud to be a part of School Health’s vison and commitment to the health, development and wellness of all students. Today we start an exciting journey together, combining our talents and knowledge with a great company.”

Rich Jackim, a managing partner at Jackim Woods & Company, advises School Health Corporation on its corporate development activities and arranged the transaction.

About School Health

Since its founding in 1957, School Health has been helping school-based health professionals keep students healthy both physically and mentally. As a national, full-service provider of health supplies and services it serves health professionals in educational settings from pre-school to college; collaborating with customers and advocating for the health of those entrusted in their care. School Health’s comprehensive offering includes health supplies, sports medicine equipment, early childhood products, and special needs aids. The company goes beyond merely supplying products by also providing product support, training, advisory services and exceptional customer care.

About Palos Sports

Palos Sports was founded in 1957. With 60 years of expertise in physical education, Palos Sports provides equipment and curriculum to schools nationwide. The company’s offerings are specifically designed to meet standards set by SHAPE America. The physical education and recreation equipment provider is known for its expert knowledge and individual attention provided to each physical educator, curriculum director, and sports director it serves.

About Jackim Woods & Company

Rich Jackim, Jackim Woods & Company, advises School Health Corporation on its corporate development activities and arranged the transaction.  Jackim Woods & Company provides financial advisory services on mergers and acquisitions to clients nationwide.