Cherry Tree & Associates | November 2022 | Volume XVI, Issue 5 | | |
Achieve Partners Acquires MasteryPrep
Achieve Partners, an education-focused private equity firm, has acquired MasteryPrep, a provider of mastery-based college readiness services. MasteryPrep provides assessment support and professional development focused on supporting underserved schools and districts to improve student outcomes on end-of-course exams. MasteryPrep claims to work with hundreds of school districts across the country.
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prnewswire.com
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Riverside Companies Acquires Motivating Systems
Riverside, a global private equity firm, has acquired Motivating Systems, a K-12 behavioral management software provider. Motivating Systems is the creator of PBIS Rewards, a framework for supporting students’ behavioral, academic, social, emotional, and mental health. The software allows customers to analyze data across infractions and rewards, providing insights for teachers, administrators, and parents. The acquisition is the latest example of Riverside’s Education and Training focus.
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rivateequitywire.co.uk
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Securly Acquires Eduspire Solutions
Securly, a student safety and wellness company has purchased Eduspire, an education technology company offering digital hall pass and flex period management solutions. Securly offers web filtering, student wellness monitoring, classroom management, parent/caregiver engagement, and technology support solutions to K-12 districts. The Company believes the acquisition will provide K-12 districts and schools with an end-to-end solution that extends student safety from online to on-campus and expanded support for student wellness
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prweb.com
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Building Wings Acquired Knowledge Unlimited
Building Wings, a special education literacy curriculum company founded by Education veteran Don Johnston, has acquired Knowledge Unlimited, a provider of supplementary learning materials. Unlimited Knowledge offers learning materials for students that help build important background knowledge across the curriculum. The acquisition is expected to allow Building Wings to continue to build its catalog of educational resources, including curriculum and instructional materials.
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newswire.com
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University Headquarters Acquires Discover Early Childhood EDU
University Headquarters, an online source for education and career information, acquired Discover Early Childhood EDU, a provider of education and career information targeted towards early childhood. The Company also recently acquired Cyber Degrees EDU, which offers information on cybersecurity programs and careers. The acquisitions are expected to expand University Headquarters’ education portfolio and build upon its database of degree and career information.
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prweb.com
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School Specialty Acquires SchoolKidz
School Specialty, LLC., a provider of learning environments, supplies, and curriculum materials for the pre-K-12 education market, acquired SchoolKidz, a provider of school supply kitting solutions for elementary and middle school students. Founded in 1995, SchoolKidz has sourced, assembled, and marketed kits and claims to have served more than 500,000 students in 2022.
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businesswire.com
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Promethean Acquires Explain Everything
Promethean, a global education technology company, has acquired the assets of Explain Everything, a digital whiteboard platform for lessons, activities, and interactive presentations. The Explain Everything mobile platforms provide users with an infinite canvas for learning and collaborating. The Company claims to have over 20 million downloads worldwide and to be one of the top educational tools on both Apple and Google platforms.
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prnewswire.com
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Career Certified Acquires Amber Book
Career Certified, the Waud Capital-backed provider of online prep courses for professional licensure exams, acquired Amber Book, a provider of online exam prep courses for those pursuing architecture licenses. The acquisition expands Career Certified’s offerings of online real estate, mortgage loan origination, and home inspection education.
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globenewswire.com
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Simplilearn Raises $45 Million and Acquires Fullstack
Simplilearn, a higher edtech platform, raised $45 million in a new funding round. Simplilearn offers digital skilling programs for professionals that are created in collaboration with educational institutions leading companies. Following its recent funding, the Company acquired Fullstack, a U.S.-based bootcamp education company. Simplilearn says that the acquisition will help it scale its presence in the bootcamp space and drive revenue growth to $200 million by 2024.
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moneycontrol.com
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Carnegie Learning Acquires Assets of MUSE Virtual
Carnegie Learning, a provider of K-12 education technology, curriculum, and professional learning solutions, acquired the MUSE Virtual School curriculum. MUSE Virtual offers environmentally focused, passion-based curriculum across five core education pillars.
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businesswire.com
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CHERRY TREE EDUCATION FOR-PROFIT 50 INDEX | |
For-profit education comprises more than 5% of the roughly $1.5 trillion that is spent on education in the U.S. annually. Cherry Tree created the Education For-Profit 50 Index representing a group of publicly traded for-profit education companies. | |
The For-Profit Education 50 Index consists of companies in the Pre-K-12, Postsecondary Education, Training and Development, and Education Products and Services segments for-profit education industry. | |
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Warren Buffet once said, “Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard.” That being said, we know that readers of this newsletter appreciate our insight into the market. If you’re thinking of selling (and if the clock on the scoreboard is thus winding down), the current and projected score can and should influence your strategy.
We’re reminded of that this month, as we have been having conversations with a variety of parties about valuation trends. We’ve closed a number of transactions this year, we’re involved in several as we go to press, and we’ve recently spent time at conferences attended by a wide cross section of industry executives and M&A professionals. The headline is that while there are still buyers looking for the right platforms to partner with or the right strategic acquisition, there are sectors where valuations have been coming down.
There are numerous signs that for good companies in the lower middle market (which we define as sub-$250 million), there has been limited change in deal volume and valuations. There are still strategics and PE firms with plenty of cash, they tend to use less debt for deals of this size, and the PE-backed strategics especially are actively looking for digestible add-ons. Larger deals are reportedly seeing valuation declines and more of a market pull back, as are high growth / high-multiple technology companies. Factors include that Venture Capital valuations have been one of the hardest hit, and that tech stocks in the public markets have seen slowing growth and profit taking by investors. From lenders we’re hearing a similar story – larger transactions involving larger amounts of debt are more challenging than for smaller companies or normal course financings. The larger question for sellers, is the degree to which negotiating leverage is shifting to buyers. At least that is the question if you’re starting to take a look at the scoreboard.
Will higher interest rates, a potential recession, or the recent election results have an impact on your business? For a confidential discussion about your company’s strategic alternatives for exiting, merging, acquiring, or obtaining venture financing, and how trends in education affect your prospects, please contact us at 952-893-9012.
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About Cherry Tree & Associates:
Cherry Tree is a Minneapolis-based investment banking firm with more than four decades of transaction experience, with education being a primary segment focus. Our services include Sell-Side M&A where ownership wants to either realize their liquidity goals or desires to recapitalize their business to better position it for future growth. Additionally, we represent Buy-Side clients in efforts to add acquisitions to complement their organic growth efforts.
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Important Disclosures
The information included in this publication has been obtained from public sources, and is not based upon private or confidential Cherry Tree information. Cherry Tree gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. Cherry Tree makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. Officers, directors, partners of Cherry Tree and Cherry Tree proprietary investment funds may have positions in the securities of the companies discussed, and certain affiliates of Cherry Tree may recommend to specific clients the purchase and sale of securities discussed in the publication. This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. Cherry Tree or its affiliates may from time to time provide investment banking or related services to these companies. Like all Cherry Tree employees, the authors of this publication receive compensation that is affected by overall firm profitability. We undertake no obligation to update any information in this publication.
The Education For-Profit (EFP) 50 Index is a hypothetical index, and does not reflect an actual investment portfolio. Comparisons between the EFP 50 Index and the S&P 500 are for illustrative purposes only. Correlations in performance information for the EFP 50 Index and the S&P 500 should not be relied upon as indicative of risks involved in owning or holding a portfolio of securities similar to the EFP 50 Index. Past performance should not be relied upon as indicative of future performance.
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