Berkery Noyes Releases Education Industry M&A Report For Third Quarter 2013
NEW YORK, Oct. 21, 2013 /PRNewswire/ -- Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2013 mergers and acquisitions trend report for the Education Industry.
The report analyzes M&A activity for the sector during the first three quarters of 2013 and compares it with data covering 2012. 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, deal volume in the Education Industry remained nearly constant from second to third quarter 2012. Transaction value fell 39 percent over the past three months, totaling $2.0 billion in third quarter 2013. Although aggregate value decreased, third quarter 2013 was responsible for the highest median deal value on a quarterly basis throughout the past two years. The median revenue multiple from 2012 through the first three quarters of 2013 decreased from 1.7x to 1.5x, while the median EBITDA multiple declined from 13.5x to 10.6x.
The industry's largest transaction in third quarter 2013 was TPG Capital's acquisition of TSL Education, a digital education publisher, for $549 million. Financial sponsors accounted for 23 percent of volume but 41 percent of total transaction value year-to-date. In addition, six of the top ten highest value deals thus far in 2013 were backed by private equity firms.
Regarding some of the market segments covered in the report, M&A activity in the Childcare Services segment improved 50 percent on a quarter-to-quarter basis. One active acquirer in the space has been Bright Horizons Family Solutions, an early education provider that was taken private in 2008 by Bain Capital for $1.3 billion. Bright Horizons acquired Children's Choice Learning for $53 million in third quarter 2013. This transaction followed Bright Horizon's acquisition of Kidsunlimited for $68 million in second quarter 2013, as well as the acquisition of Casterbridge Care & Education for $116 million in 2012.
Meanwhile, deal volume in the Professional Training Institutions segment year-to-date increased 23 percent relative to the corresponding timeframe in 2012. The segment's highest value transaction in third quarter 2013 was Providence Equity Partners' acquisition of Informa's five corporate training businesses for $165 million. As for related acquirers, developer training platform Pluralsight completed two acquisitions in the quarter: TrainSignal, a training network focused on IT professionals, for $24 million; and PeepCode, an open-source training solution for Web developers. Also of note, Twitter has shown an interest in open-source training solutions, as indicated by the company's acquisition of Marakana. With this transaction, Twitter is creating its own "university" to provide its engineering staff with more technical course offerings and tutorials.
"Education M&A activity continues to rebound at a steady pace, as companies in the cyclical subsectors in education, childcare services and corporate training benefit from an improving economic environment and continue to be of interest to the larger strategic acquirers," said Peter Yoon, Managing Director at Berkery Noyes. "In the K-12 and postsecondary areas, certain niches that help improve student performance, teacher efficiency, retention and overall outcomes – such as adaptive/personalized learning platforms, data and assessment companies, and blended and online learning solutions – continue to have a meaningful impact." Yoon continued, "Additional niche areas that are of strong focus by potential acquirers include English language learning solutions and education market focused infrastructure software."
A copy of the EDUCATION INDUSTRY M&A REPORT FOR THIRD QUARTER 2013 is available at the Berkery Noyes website.
About Berkery Noyes
Berkery Noyes is an independent investment banking advisory firm servicing the information industry. The firm specializes in mergers and acquisitions advisory, debt and equity financing, and financial consulting services for companies in the $10 million to $500 million range. Since its founding by Joseph W. Berkery in 1983, Berkery Noyes has worked with corporate clients to grow through acquisition, divest non-core assets, and maximize shareholder returns through strategic transactions and restructurings. For private owners, Berkery Noyes helps create liquidity and execute timely exit strategies that achieve their personal and professional objectives. The firm's research teams publish acquisition activity in the respective sectors they follow on MandAsoft.com.
Securities services are offered through Berkery Noyes Securities, LLC. For more information, visit www.berkerynoyes.com.
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