Pace of Mergers and Acquisitions in Education Market Jumps, New Analysis Finds

The total value of mergers and acquisitions in the education industry grew more than 50 percent from the second half of 2020 to the first half of this year as companies across the market quickly topped up their portfolios, according to a report from investment banking firm Berkery Noyes.

The total number of individual M&A deals also rebounded to pre-pandemic levels.

Education companies completed 240 acquisitions in the first six months of 2021, up from 222 deals in the second half of 2020 and 210 mergers in the first half of last year. There were 238 acquisitions in the education industry in the second half of 2019.

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

Deals made during this period were worth almost as much as mergers and acquisitions for full 2020, totaling $ 21.4 billion.

The investment group, which advises and finances medium-sized companies in the technology and information sector, pursued 1,152 educational deals between 2019 and June 2021.

Private equity financed 40 percent of acquisitions in the first half of the year, 8 percent more than the 2019-2021 overall average.

According to Berkery Noyes, 97 of the 240 deals during that period were funded by private equity, venture capital, or some other investment firm, most for at least three years and a 131 percent increase from the first half of 2020.

Twelve deals in the first half of this year were valued at more than $ 100 million, and at least seven of them were in the K-12 sector. About a third of the total transactions were valued between $ 4.5 million and $ 54.6 million.

K-12 Media and Tech outperformed professional training services as the most active market segment in the education industry for the year to date.

In the second half of last year, there were about 50 acquisitions involving professional training services and about 40 deals involving K-12 media and technology, while nearly 60 transactions involving K-12 media and technology and about 45 Deals professional training services in the first half of 2021.

The report showed a mixed picture for market activity in various segments in the first six months of this year compared to the second half of 2020.

The number of degrees in childcare and higher quality media and technology areas increased over this period, but the number of degrees in VET technology, colleges, and K-20 services declined. Business with K-12 institutes remained stable.

In addition to the McGraw Hill acquisition, notable K-12 deals in the first half of 2021 included Byju’s acquisition of Indian tutoring provider Aakash Educational Services for 900 million single sign-on provider Clever.

Image by Getty

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