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Berkery Noyes Releases 2011 Education Industry Mergers & Acquisitions Report

Monday, January 23, 2012

Berkery Noyes, an independent middle market investment bank, today released its 2011 Full Year Mergers and Acquisitions trend report for the Education Industry.

The report analyzes the sector for 2011 and compares it with similar activity in 2009 and 2010. This market includes information and technology companies servicing the Education Industry, including the K-12, Post-Secondary, and Corporate and Professional segments.

Providence Equity Partners’ acquisition of Blackboard for $1.71 billion, completed in the third quarter of 2011, was the second largest Education deal in 2011. This transaction exemplifies how interactive learning and the evolving delivery of content are changing the Education marketplace. One of the most prolific acquirers by value between 2009 and 2011 was Providence Equity Partners, with a combined total of over $3 billion in the industry.

The median revenue multiple remained nearly the same, moving from 1.9x in 2010 to 1.8x in 2011. However, the median EBITDA multiple increased from 9.7x to 11.1x. Using a logarithmic scale, Berkery Noyes determined that nearly one third of Education companies acquired in 2011 had transaction values of $4.5 million to $54.6 million.

In addition, Apple’s recently announced iPad textbook initiative illustrates the increasing possibilities for M&A in Education technology.

“2011 was a successful year for M&A in the education industry across most sectors in terms of activity and valuations,” said Berkery Noyes managing director Mary Jo Zandy. “This momentum has further built in the first quarter of 2012. Areas of most interest to acquirers at the present time are online education, education services and education technology companies. Still, consolidation is ongoing among print-based education businesses, and the anticipated effects of common core standards implementation are likely to accelerate this trend.”

A copy of the FULL YEAR 2011 EDUCATION INDUSTRY M&A TREND REPORT is available at the Berkery Noyes website.