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T E C H N O L O G Y , M E D I A & T E L E C O M PAGE | 0
EDUCATION TECHNOLOGY & SERVICES SECTOR REVIEW | 1Q 2020
Technology, Media & Telecom
Education Technology and Services Sector Review | 1Q 2020
HW Education Technology and Services Introduction
Brian TitteringtonDirector
[email protected](415)217-3425
Mike WilkinsCo-Head TMT Group
[email protected](415) 217-3411
GLOBAL HW EDUCATION TECHNOLOGY AND SERVICES TEAM
SELECT HW EXPERIENCE
has merged withhas been
acquired byhas been
acquired byhas been
acquired byhas been
acquired byhas been
acquired byhas been
acquired by
has received a majority
investment from
has received an investment from
1
Thierry MonjauzeCo-Head TMT Group
[email protected]+44 20 7518 8901
Derek LewisManaging Director
[email protected](804) 915-0118
Andy LeedDirector
[email protected](415) 217-3420
Anthony BenjaminDirector
[email protected](804) 807-6030
HW TECHNOLOGY, MEDIA & TELECOM (“TMT”) GROUPHARRIS WILLIAMS (“HW”)
• 25+ years and more than 1,000 closed transactions
• 360+ professionals across eight office globally
• 170+ closed transactions in the last 24 months
• 10 industry groups
• 35+ dedicated TMT professionals
• TMT offices include Boston, San Francisco, and London
FOCUSED ADVISORY SERVICES
• Mergers and acquisitions (M&A)
• Capital raises
• Corporate divestitures
VERTICAL FOCUS SECTORS
• Architecture, Engineering, and Construction Software
• Education Technology and Services
• Energy Technology
• Facilities and Real Estate Software
• Financial Technology and Payments
• Government Technology
• Healthcare IT
• Industrial and Supply Chain Technology
• Internet and eCommerce
• Retail Technology
HORIZONTAL FOCUS SECTORS
• Application Software
• Cloud Managed Services and Hosting Solutions
• Compliance Solutions
• CRM and Marketing Automation
• Human Capital Management
• Infrastructure and Security Software
• IT and Tech-Enabled Services
• Marketing, Research, and Insights Software
KEY TMT THEMES
SaaS/Cloud Data & Analytics Digital Transformation A.I./Machine Learning
CONSISTENT RECOGNITION FOR QUALITY
HW Current Market Observations and Insights
LATEST HW MARKET INSIGHTS
For access to HW’s latest insight and perspective, email us at [email protected] or visit www.harriswilliams.com/news-insights
CURRENT MARKET OBSERVATIONS
2
For access to HW’s TMT content, email us at [email protected]
Deep Sector Expertise Across Key TMT Focus Areas
• Architecture, Engineering, and Construction
• eCommerce
• Financial Technology and Payments
• Healthcare IT
• Industrial and Supply Chain Technology
• and more
Buyer Sentiment
• The desire to invest remains – buyers are actively seeking to deploy capital
• Private equity firms and strategic acquirers have focused on meeting near-term operational needs and assessing the medium- to long-term impact of COVID-19
• Despite economic uncertainty, financial sponsors have record levels of capital to deploy, and many are communicating that they are “open for business” while acknowledging high-quality deal flow will be limited
• As capital markets stabilize, companies with strong liquidity positions will be well-positioned to pursue acquisitions that accelerate growth
Economic Outlook
• Volatility in the public markets will likely remain as investors, businesses, and policy-makers evaluate rapidly evolving COVID-19 developments
• Economists and industry analysts expect a meaningful decline in GDP in 2Q‘20 and 3Q‘20, while they debate the shape and timing of the recovery
Debt Markets
• In contrast to the first half of 1Q’20, debt markets have shifted to a risk-off mentality
• Concerns over liquidity and funding availability contribute to uncertainty regarding the duration of the COVID-19 risk mitigation focus
M&A Valuations
• COVID-19 has pushed timelines for many transactions, but select deals are still closing successfully. Some may be temporarily on hold and others are preparing for market and carefully weighing timing
• Companies that prove their ability to weather the current circumstances will receive significant interest and garner premium valuations
M&A Learnings from Past Economic Disruptions
COVID-19 and M&A: Insights from Asia
Recent Publications
Global Consumer Businesses Consider Emergence from COVID-19
Education Technology and Services Focus Areas
Select Market Participants
Key Trends(1)
Higher Education
Solutions focused on serving the educational and administrative needs of higher
education institutions
STUDENT INFORMATION SYSTEMS
CRM AND ENROLLMENT MANAGEMENT
LEARNING MANAGEMENT SYSTEMS
COMPETENCY-BASED LEARNING
FUNDRAISING AND ALUMNI MANAGEMENT
LEARNING ANALYTICS AND ASSESSMENTS
Spending on Higher Education Technology in the United States is expected to increase to
$29.8B by 2022
Higher Education institutions are broadening usage of mobile technology and software that
enables data-driven decision-making
Retention and enrollment solutions are increasingly being sought out by universities as
a means to better attract and retain student populations
Select Market Participants
K-12 Education
Solutions focused on serving the educational and administrative needs of K-12 schools
and districts
STUDENT INFORMATION SYSTEMS
PERSONALIZED/ ADAPTIVE LEARNING
LEARNING MANAGEMENT SYSTEMS
LEARNING ANALYTICS AND ASSESSMENTS
OUTCOMES AND PERFORMANCE MANAGEMENT
TUTORING AND ADVANCEMENT
Key Trends(1)
K-12 Education Technology spending in the United States is expected to reach $21.1B
by 2022
Districts and schools are increasingly leveraging data in order to drive and substantiate educational outcomes in
accordance with federal/state mandates
Adoption of digital tools and assessments continues to accelerate as administrators are seeing pronounced impact on student
performance and educators’ workflow efficiency
Select Market Participants
Key Trends(2)
Professional Education/Training
Solutions focused on supporting the continuing education and regulatory and compliance
requirements of corporations
CONTINUING EDUCATIONTRAINING/ LICENSURE
SKILL DEVELOPMENT
HR AND TALENT MANAGEMENT
DISTANCE LEARNING
GOVERNANCE, RISK, AND COMPLIANCE
Professional Education/Training spend is expected to reach $113.8B across the globe
by 2022
Corporations are investing in professional development as a way to attract and retain
employees and optimize workforce productivity
Personalized learning continues to evolve with new methods of delivery, while
certifications remain a way for individuals to differentiate in a competitive marketplace
3
Case Study: Kalkomey
HW’s TMT Group advised Kalkomey, a portfolio company of Inverness Graham, on its sale to Cove Hill Partners.
Mike WilkinsManaging Director
EDUCATION TECHNOLOGYPROFESSIONAL EDUCATION/
CERTIFICATIONSGOVTECH
a portfolio company of
has been acquired by
Kalkomey is a leading provider of online recreational safety education reaching all 50 U.S. states, as well as Australia, Canada, Guam, Mexico, New Zealand, Puerto Rico, and the United Kingdom. The Company works hand-in-hand with governmental agencies to provide tailored online safety education courses and certifications for boating, scuba diving, hunting, snowmobiling, and off-roading.
Kalkomey's regulatory-approved safety education courses provide official safety certifications to nearly a million students annually. The Company's cloud-based government agency software offerings drive operational efficiencies of key workflows from licensing and registration, to certification and event management, to compliance and reporting.
Cove Hill is a long-term-oriented private equity firm focused on partnering with management teams to build market-leading technology and consumer companies. The firm manages a long-duration fund with over $1 billion of commitments from its investors and founders. Based in Boston, Cove Hill has an innovative structure that provides the flexibility to enable a patient, concentrated, and value-add approach in a small portfolio of long-term investments.
Andy LeedDirector
Ben de FiebreAssociate
4
Tyler DewingManaging Director
Brian TitteringtonDirector
HW DEAL CONTACTS
TRANSACTION OVERVIEW
RELEVANT SUB-SECTORS
Case Study: CPI
PROFESSIONAL EDUCATION AND CERTIFICATIONS
GOVERNANCE, RISK, AND COMPLIANCE
EDTECH
HW’s TMT Group advised CPI, a portfolio company of FFL Partners, on its sale to Wendel.
a portfolio company of
has been acquired by
CPI is a premier provider of behavioral management and crisis intervention training solutions and certifications. The Company has trained over 10 million individuals in research-based best practices for responding to anxious, hostile, and violent behaviors in the workplace with safe and effective methods.
CPI is a leading provider of crisis prevention training and professional certifications. The Company has dedicated 40+ years to providing unique and proprietary training content, methodologies, and solutions proven to reduce violence and create safe workplace environments.
Wendel is one of Europe’s leading listed investment firms. Wendel plays an active role as a controlling or lead shareholder in its portfolio companies. The firm implements long-term development strategies, which involve boosting growth and margins of companies so as to enhance their leading market positions.
Mike WilkinsManaging Director
Derek LewisManaging Director
Andy LeedDirector
HW DEAL CONTACTS
5
TRANSACTION OVERVIEW
RELEVANT SUB-SECTORS
Credentials Solutions’ merger with Parchment
K12’s acquisition of Galvanize
• Campus Management is a global provider of cloud-based student information systems (SIS), CRM and ERP solutions, and Edcentric is a provider of data-driven solutions around student and alumni engagement, retention, and compliance
• Campus Management offers solutions for more than 1,100 colleges and universities in over 30 countries, while Edcentric offers solutions to over 1,400 higher education institutions
• The combined company will be uniquely positioned to help higher education institutions increase operational efficiency, promote student success, and improve overall institutional effectiveness
Completed February 20, 2020
EV: NP
Rev: NP EV/EBITDA: NP
EV/Rev: NP
• Galvanize is a provider of software engineering and data science workforce training and offers full-time and part-time immersive online boot camps across the U.S.
• Galvanize operates eight campuses across the U.S. with over 8,000 graduates and alumni in over 2,250 companies
• Post-acquisition, K12 will be able to expand its career education offering beyond high school by developing talent and capabilities for learners of all ages and backgrounds
Completed January 27, 2020
EV: $165M
Rev: NP EV/EBITDA: NP
EV/Rev: NP
• Parchment is a provider of a digital credential service platform that allows learners, academic institutions, and employers to request, verify, and share credentials in simple and secure ways
• Parchment’s platform has helped millions of people exchange more than 30 million transcripts and credentials globally
• The merger will provide credential issuers and receivers with a scaled partner focused on modernizing the exchange of verifiable academic and professional credentials
Completed February 11, 2020
EV: NP
Rev: NP EV/EBITDA: NP
EV/Rev: NP
ProfessionalEducation
HigherEducation
HigherEducation
Cornerstone’s pending acquisition of Saba
• Saba is a provider of a cloud-based intelligent learning and skills development platform for organizations to develop, engage, and inspire employees
• With over 20 years of industry experience, Saba continues to support employee growth through learning, performance, and recruiting solutions, serving over 4,000 customers worldwide
• Cornerstone will have an expanded reach and ability to help a larger, diverse group of clients, as the combined company will have more than 75 million users and serve ~7,000 organizations of all sizes globally
Announced February 24, 2020
Rev: $243M EV/EBITDA: NM
EV/Rev: 5.7xEV: $1,395M
Veritas Capital’s acquisition of Campus Management and Edcentric
Notable 1Q’20 Education Technology and Services Transactions
ProfessionalEducation
6
The Riverside Company’s acquisition of Red Nucleus
• Red Nucleus is a provider of learning and performance enhancement solutions for professionals serving in the life sciences industry
• With more than 256 industry awards, Red Nucleus’ eLearning platform delivers the latest research-based adult learning methodologies to a client base of over 200 companies
• The Riverside Company’s acquisition of Red Nucleus will help to transform the Company into a diversified tech-enabled training and compliance platform through strategic organic and investment initiatives
EV: $145M
Rev: NP EV/EBITDA: NP
EV/Rev: NP
Completed January 15, 2020
ProfessionalEducation
HW’s Perspective on the Impact of COVID-19
Short-Term Impact• Education providers are quickly developing and releasing COVID-19
continuing education courses and webinars, often free of charge• Several major in-person exams, such as the Bar or CFA exams, have
been cancelled and are scheduled to resume again later in 2020
Long-Term Impact• Consumers are expected to accelerate their adoption rates of distance
learning and online training
Impact
4
Impact
3
Short-Term Impact• Nearly 1,000 colleges across the U.S. are relaxing admissions requirements
for students who enroll in Fall 2020 and beyond, including suspending standardized test requirements
• Admissions directors estimate that nearly 30% to 45% of students may not show up for their first day of classes due to international visa issues
• Most universities have moved in-person classes to online platforms for the current quarter or semester
Long-Term Impact• Some university systems have committed to making their new
standardized test-optional admissions policies permanent• The Graduate Management Admission Council announced the
implementation of an online interim GMAT exam, with the potential for the exam to be made available indefinitely
Impact
4
Impact
2
Short-Term Impact• In a recent survey, 70% of parents reported that their children were
participating in an online distance learning program offered by their school, while 26% are being homeschooled with materials selected by the parents
Long-Term Impact• Over 40% of parents are concerned about negative impact on their
child’s education and nearly 30% believe the school year should be extended into the summer
Impact
4
Impact
3
2Moderate Impact
3Strong Impact
4Significant Impact
Many education systems will find that returning to “normal” will no longer be an option, which could be an important lever to catalyze system transformation, which is so badly needed
– The Brookings Institution
7
Higher Education
K-12 Education
Professional Education/Training
Close Da te Ta rge t Ac quire r EV ($ M)
Pending $1,395
Mar- 20 NP
Mar- 20 NP
Feb- 20 NP
Jan- 20 $165
Jan- 20 NP
Jan- 20 $145
Jan- 20 $129
Jan- 20 NP
Dec- 19 $910
Dec- 19 NP
Dec- 19 NP
Nov- 19 NP
Nov- 19 NP
Oct- 19 $100
Professional Education/Training Market Overview
RECENT SECTOR ACTIVITY(3)(4)EXPANSIVE, MULTI-VERTICAL MARKET
KEY MARKET DRIVERS
• Acceleration of distance learning resulting from COVID-19 pandemic
• Mandatory compliance and continuing education programs giving rise to attractive, repeat business models
• Availability of quality content continues to be a key pain point for highly regulated markets
• Companies are navigating increasingly complex regulatory environments with costly penalties for non-compliance
• Expansion of dynamic personalized learning methods such as gamification and micro-learning
xy3
PROFESSIONAL EDUCATION/TRAINING
GLOBAL PROFESSIONAL EDUCATION/TRAINING(2)
($ billions)
• The global Professional Education/Training market is expected to reach $113.8 billion by 2022, growing at a 10.0% CAGR
$85.5
$113.8
2019 2022P
8
Professional Education/Training Landscape
VERTICAL TRAINING SKILL DEVELOPMENT TECHNOLOGY SOLUTIONS
Healthcare
Wellness and Fitness
Emergency Response (Fire, EMT, Law Enforcement)
Financial Services and Insurance IT / Developer
Legal and Accounting
Education
Real Estate
Transportation
Specialty Training
eLearning Marketplaces
Sales and Marketing
Leadership Development
LMS / Talent Management
Content Development / Editing
MU
LTI-
VER
TIC
AL
PLA
TFO
RM
S
Product / Project Management
Life Sciences / Dental / Medical Device
Security Awareness
Language
Exam Delivery
9
Close Da te Ta rge t Ac quire r EV ($ M)
Pending NP
Feb- 20 NP
Feb- 20 NP
Feb- 20 NP
Feb- 20 NP
Feb- 20 NP
Feb- 20 NP
Dec- 19 $850
Dec- 19 NP
Nov- 19 NP
Nov- 19 NP
Oct- 19 NP
Oct- 19 NP
Oct- 19 NP
Sep- 19 NP
$24.6
$29.8
2019 2022P
Software Hardware IT Services
KEY MARKET DRIVERS
• Growing acceptance that having a data-driven information management strategy is now a necessity for all institutions
• Continued shift to digital content, assessments, and learning modalities
• Rising demand for personalized learning tailored to an individual’s needs
• IT driving department savings through automated administrative workflows and streamlined recruitment/enrollment
• Accelerating adoption of distance and mobile learning
HIGHER EDUCATION
HIGHER EDUCATION TECHNOLOGY MARKET(1)
($ billions)
• The U.S. continues to spend significantly on Higher Education technology, with the market expected to reach $29.8 billion by 2022
5.8%
0.3%
3.6%
CAGR‘19-’22P
Higher Education Technology Market Overview
RECENT SECTOR ACTIVITY(3)(4)SPENDING LEVELS REMAIN STRONG
/
10
Higher Education Technology Landscape
PERSONALIZING LEARNING
IMPROVING OPERATIONS
DIV
ERSI
FIED
PLA
TFO
RM
S
Assessments / Adaptive Learning
Insights and Analytics
Procurement / Operations / Payments HR Recruiting / Compliance / Professional Development
Alumni Relations / Financial Aid
Enrollment Solutions / Career Readiness
Marketing / Web / Community
Online Skill Development / Tutoring
OPTIMIZING ADMINISTRATION
Educational Content Student Information Systems (SIS)Student Information Systems (SIS)
Learning Management Systems (LMS)
CRM / Retention Solutions
11
Close Da te Ta rge t Ac quire r EV ($ M)
Pending NP
Pending NP
Mar- 20 $2,000
Mar- 20 NP
Mar- 20 NP
Mar- 20 NP
Feb- 20 NP
Feb- 20 NP
Jan- 20 NP
Jan- 20 $25
Dec- 19 NP
Nov- 19 NP
Nov- 19 NP
Oct- 19 NP
Oct- 19 NP
$17.5
$21.1
2019 2022P
Software Hardware IT Services
K-12 Education Technology Market Overview
RECENT SECTOR ACTIVITY(3)(4)EVOLVING MARKET WITH TECHNOLOGY DISRUPTION
KEY MARKET DRIVERS
• Increased emphasis on performance, reporting, and accountability underpinned by new legislation such as ESSA (Every Student Succeeds Act)
• Growing interest in data as a means to drive and substantiate student outcomes
• Greater usage of tools to drive engagement between parents, teachers, and administrators
• Consolidation of technology purchasing at the district level, with demand for solutions that address student, classroom, and administrator workflows
• Rising prominence of formative assessments coupled with data analytics that measure student mastery in order to support in-progress development
K-12
K-12 EDUCATION TECHNOLOGY MARKET(1)
($ billions)
• The U.S. continues to spend significantly on K-12 education technology, with the market expected to reach $21.1 billion by 2022P
9.4%
0.7%
6.1%
CAGR‘19-’22P
12
K-12 Education Technology Landscape
PERSONALIZING LEARNING
DIV
ERSI
FIED
PLA
TFO
RM
S
Learning Management Systems Data and Analytics
IMPROVING OPERATIONS
OPTIMIZING CONTENT
eLearning and Open Source Content
Item Banks / Curriculum ContentLearning Content
Classroom Management Tutor / Study Tools Special Education
Adaptive Learning Assessment Tools Gamified Learning
Student Information Systems
School Operations
HR / Professional Growth
Payments
Marketplaces
Marketing / Web / Community
13
Public Education Technology & Services Companies3
Key Public Companies Indexed Stock Performance
EDU
CA
TIO
N T
ECH
NO
LOG
Y P
LATF
OR
MS
Trading Metrics
EV/2020E EBITDA
EV/2020E Revenue
0.5x 8.7x2.1x
4.2x 27.8x11.2x
Key Public Companies Indexed Stock Performance
EDU
CA
TIO
NA
L C
ON
TEN
T A
ND
PU
BLI
SHIN
G
Trading Metrics
EV/2020E EBITDA
EV/2020E Revenue
0.5x 5.8x1.6x
4.0x 18.4x9.0x
Key Public Companies Indexed Stock Performance
PR
OFE
SSIO
NA
L ED
UC
ATI
ON
SER
VIC
ES
Trading Metrics
EV/2020E EBITDA
EV/2020E Revenue
0.4x 1.8x1.1x
6.0x 7.3x7.1x
Key Public Companies Indexed Stock Performance
FOR
PR
OFI
T ED
UC
ATI
ON
Trading Metrics
EV/2020E EBITDA
EV/2020E Revenue
0.6x 4.3x1.9x
6.0x 11.1x7.8x
Key Public Companies Indexed Stock Performance
INTE
RN
ATI
ON
AL
EDU
CA
TIO
N
Trading Metrics
EV/2020E EBITDA
EV/2020E Revenue
0.9x 11.5x5.3x
15.3x 21.1x18.2x
0.0%
50.0%
100.0%
150.0%
200.0%
Apr-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20
S&P 500Education Technology Platforms
0.0%
50.0%
100.0%
150.0%
200.0%
Apr-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20
S&P 500Professional Education Services
0.0%
50.0%
100.0%
150.0%
200.0%
Apr-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20
S&P 500For Profi t Education
14Note: As of March 31, 2020
129.6%
109.4%
109.4%
(44.7%)
109.4%
(92.9%)
109.4%
(75.5%)
109.4%
224.1%
0.0%
100.0%
200.0%
300.0%
Apr-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20
S&P 500International Education
0.0%
50.0%
100.0%
150.0%
200.0%
Apr-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20
S&P 500Educational Content and Publ ishing
Education Technology & Services – Trading Comparables3
PUBLIC COMPARABLES
As of March 31, 2020 ($ in millions)
EDUCATION TECHNOLOGY PLATFORMS
EDUCATIONAL CONTENT AND PUBLISHING
PROFESSIONAL EDUCATION SERVICES
INTERNATIONAL EDUCATION
Chegg, Inc. CHGG $4,513 $4,361 74.2% (5.2%) 323.9% 28.0% 27.0% 31.3% 11.0x 8.7x NM 27.8x NM
Pluralsight, Inc. PS 1,285 1,157 30.8% (65.1%) NM 36.6% 22.8% NM 4.1x 3.3x NM NM NM
2U, Inc. TWOU 1,500 1,350 28.6% (70.5%) (46.5%) 39.6% 27.2% NM 2.6x 2.1x NM NM NM
K12 Inc. LRN 577 740 50.4% (44.8%) (1.5%) 4.7% 6.2% 12.6% 0.6x 0.5x 10.0x 4.2x 23.6x
HealthStream, Inc. HSTM 636 775 80.4% (15.5%) (1.2%) 9.7% (1.1%) 17.2% 2.5x 2.5x 20.1x 14.7x 54.6x
Rosetta Stone Inc. RST 312 348 52.2% (33.9%) 43.8% 5.2% 5.2% 2.2% 1.7x 1.6x NM NM NM
Tribal Group plc TRB 128 143 74.3% (24.2%) (30.4%) 1.5% (17.1%) 18.9% 1.2x 1.5x NM 7.7x NM
Education Technology Platforms Median $636 $775 52.2% (33.9%) (1.3%) 9.7% 6.2% 17.2% 2.5x 2.1x 15.0x 11.2x 39.1x
FOR PROFIT EDUCATION
Adtalem Global Education Inc. ATGE $2,002 $1,418 51.7% (42.9%) (24.4%) 13.3% (4.9%) 24.9% 1.6x 1.8x 8.2x 7.3x 12.9x
Franklin Covey Co. FC 226 215 37.1% (41.0%) (23.1%) 6.4% 7.3% 12.6% 1.0x 0.9x 11.7x 7.3x NM
GP Strategies Corporation GPX 220 111 39.0% (46.1%) (74.3%) 13.2% 1.3% 6.3% 0.4x 0.4x 8.3x 6.0x 7.2x
Wilmington plc WIL 193 126 42.3% (47.8%) (53.9%) 5.9% (4.5%) 18.0% 1.2x 1.2x 6.3x 6.9x 11.0x
Professional Education Services Median $223 $171 40.7% (44.5%) (39.1%) 9.8% (1.6%) 15.3% 1.1x 1.1x 8.3x 7.1x 11.0x
15
Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth 2020E EBITDA Enterprise Value / Price /
Company Ticker Value Capitalization Week High Performance Performance LTM 2020E Margin 'LTM Rev. '20E Rev. 'LTM EBITDA '20E EBITDA Earnings
RELX PLC REL $49,367 $41,517 82.1% 0.4% 10.1% 9.2% (4.4%) 35.9% 4.7x 4.9x 15.5x 13.7x 22.5x
Thomson Reuters Corporation TSX:TRI 35,672 33,485 87.2% 14.3% 42.3% 7.4% 4.0% 31.6% 6.0x 5.8x 32.6x 18.4x 23.7x
Wolters Kluwer N.V. WKL 21,189 18,753 90.4% 3.8% 69.3% 6.1% 3.0% 29.5% 4.1x 4.0x 14.5x 13.5x 26.1x
Pearson plc LSE:PSON 6,724 5,154 58.1% (38.2%) (19.5%) (2.6%) (9.0%) 16.7% 1.3x 1.4x 9.8x 8.6x 16.3x
John Wiley & Sons, Inc. JW.A 2,964 2,104 74.9% (15.3%) (30.3%) 3.5% 2.9% 19.7% 1.6x 1.6x 9.6x 7.9x 14.5x
Houghton Mifflin Harcourt Company HMHC 741 236 22.6% (75.2%) (81.5%) NM 0.6% 13.2% 0.5x 0.5x NM 4.0x 0.0x
Scholastic Corporation SCHL 714 874 55.7% (37.0%) (40.1%) NM (7.5%) 5.2% 0.4x 0.5x 9.4x 9.0x 0.0x
Educational Content and Publishing Median $6,724 $5,154 74.9% (15.3%) (19.5%) 6.1% 0.6% 19.7% 1.6x 1.6x 12.1x 9.0x 16.3x
Laureate Education, Inc. LAUR $4,126 $2,203 48.5% (29.7%) (26.3%) (1.2%) (2.9%) 21.4% 1.3x 1.3x 8.0x 6.1x 160.1x
Grand Canyon Education, Inc. LOPE 3,668 3,642 57.5% (33.7%) 6.5% (7.9%) 9.8% 38.7% 4.7x 4.3x 12.4x 11.1x 14.2x
Strategic Education, Inc. STRA 2,724 3,073 73.6% 5.8% 73.6% 57.2% 6.0% 27.0% 2.7x 2.6x 11.8x 9.6x 38.1x
American Public Education, Inc. APEI 168 357 68.4% (22.2%) 4.5% (3.8%) 3.0% 9.5% 0.6x 0.6x 4.5x 6.0x 38.6x
For Profit Education Median $3,196 $2,638 63.0% (25.9%) 5.5% (2.5%) 4.5% 24.2% 2.0x 1.9x 9.9x 7.8x 38.3x
TAL Education Group TAL $30,213 $31,516 89.1% 47.8% 199.9% 37.9% 32.8% 13.9% 9.4x 7.1x NM NM NM
New Oriental Education & Technology EDU 15,107 17,148 76.0% 21.6% 79.3% 26.0% 20.4% 17.1% 4.3x 3.6x 26.2x 21.1x 42.6x
GSX Techedu Inc. GSX 9,923 10,109 91.3% NM NM 425.8% 197.3% 0.0% 32.7x 11.5x NM NA NM
China Education Group Holdings Limited SEHK:839 2,887 2,815 79.6% (7.6%) NM 87.3% 29.4% 51.7% 10.6x 7.9x 22.1x 15.3x 33.8x
Meten International Education Group METX 1,300 1,242 98.5% NM NM 76.3% NM NA 6.4x NA NM NA NM
51 Talk COE 467 592 78.0% 400.0% 50.9% 27.5% 20.8% 0.0% 2.2x 1.8x NM NA NM
China Distance Education Holdings DL 217 226 55.8% (0.7%) (34.4%) 27.2% 12.4% 0.0% 1.0x 0.9x 5.1x NA 12.7x
International Education Median $2,887 $2,815 79.6% 21.6% 65.1% 37.9% 25.1% 6.9% 6.4x 5.3x 22.1x 18.2x 33.8x
Harris Williams Capabilities and Locations
HARRIS WILLIAMS OFFICE LOCATIONS
Harris Williams has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep-sector experience, integrated industry intelligence, and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website at www.harriswilliams.com/industries.
UNITED STATES EUROPE
Healthcare & Life Sciences Industrials
Energy, Power & Infrastructure
IndustrialsAerospace, Defense &
Government Services
Building Products & Materials
Business Services
Consumer Specialty Distribution
Technology, Media & Telecom
Transportation & Logistics
BostonOne International PlaceSuite 2620Boston, Massachusetts 02110Phone: +1 (617) 482-7501
Cleveland1900 East 9th Street20th FloorCleveland, Ohio 44114Phone: +1 (216) 689-2400
Minneapolis222 South 9th StreetSuite 3350Minneapolis, Minnesota 55402Phone: +1 (612) 359-2700
Richmond (Headquarters)1001 Haxall Point9th FloorRichmond, Virginia 23219Phone: +1 (804) 648-0072
San Francisco575 Market Street31st FloorSan Francisco, California 94105Phone: +1 (415) 288-4260
Washington, D.C. 800 17th St. NW2nd FloorWashington, D.C. 20006Phone: +1 (202) 207-2300
FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone: +49 069 3650638 00
London25 Savile Row
4th FloorLondon W1S 2ER, EnglandPhone: +44 (0) 20 7518 8900
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Sources & Disclosures
1. Gartner.
2. Technavio.
3. Capital IQ.
4. PitchBook.
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SOURCES
DISCLOSURES
The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.
Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 8th Floor, 20 Farringdon Street, London EC4A 4AB, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: [email protected]). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. DE321666994). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.