April 2017
Volume XI, Issue 10
Purdue University Acquires Kaplan University 
Purdue University has acquired Kaplan University for from Graham Holdings Co. (NYSE:GHC). Purdue will pay $1, plus up to 12.5% of the new school's revenue if certain conditions are met over the initial 30-year period, and Kaplan will retain a six year agreement to provide various services. The 32,000 students, 15 campuses and learning centers, and online curriculum will form a new university, which will utilize the Purdue name in some manner. The new university will target working adults, primarily operate online, and cover its operating expenses through tuition and fundraising. The transaction is subject to the approval of the Department of Education and the Higher Learning Commission
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Blackstone and CPPIB Agree to Acquire Ascend Learning
The Blackstone Group (NYSE:BX) and Canada Pension Plan Investment Board (CPPIB) have agreed to acquire Ascend Learning, a provider of technology-based educational, curriculum, and assessment solutions. Blackstone and CPPIB are focused on holding their investments for longer time periods than the typical five to seven private equity strategy. Terms of the deal were not disclosed. Earlier reports suggested the deal value at more than $2 billion
EverFi Raises $190.0 Million...  
EverFi, provider of a digital learning platform for critical skill and prevention education, has raised $190.0 million in the third largest edtech funding round of all time. Rise Fund, a new fund focused on social impact investing managed by TPG Growth, led the round with a $120.0 million investment. The round also included $30.0 million from TPG Growth and undisclosed sums from MainStreet Investment Advisors, Advance Publications, and others. EverFi has now raised a startling $251 million, but has reportedly yet to reach a $1 billion valuation
... And Acquires Workplace Answers
EverFi has acquired Workplace Answers, a Washington, D.C.-based provider of online compliance training courses. Workplace Answers offers courses for the technology, retail, manufacturing, financial services, healthcare/pharma, government, and non-profit sectors. The courses can be translated into more than 50 languages. Terms of the deal were not disclosed
CPPIB and Baring Private Equity Asia Agree to Acquire Nord Anglia Education
Canada Pension Plan Investment Board and Baring Private Equity Asia have agreed to acquire Nord Anglia Education (NYSE:NORD), an operator of premium international schools based out of Hong Kong. The investment consortium will take the company private at a value of approximately $4.3 billion (4.9x EV/Rev., 24.4x EV/EBITDA). Nord Anglia Education operates 43 international schools located in China, the Middle East, Southeast Asia, North America, and Europe
Blackbaud Acquires AcademicWorks for $50.0 Million
Blackbaud (NASDAQ:BLKB), a cloud software solutions provider, has acquired AcademicWorks, a scholarship management platform provider, for $50.0 million. Research conducted by AcademicWorks has shown that up to 30% of scholarship funds are not utilized. Therefore, AcademicWorks created a product where students apply for all scholarships at an institution through a single, streamlined process. The platform is used by K-12 schools, higher education institutions, foundations, and grant-making institutions
Frontline Education Acquires Teachers-Teachers
Frontline Education, a provider of cloud-based K-12 education software, has acquired Teachers-Teachers, operator of a job search website for educators. The transaction continues Frontline's streak of acquisitions, making it five since the start of 2016. K-12 administrative solutions is a highly competitive sector led by PowerSchool Group, who has been quickly growing thanks in part to an aggressive acquisition strategy. Terms of the deal were not disclosed
Relias Learning Acquires Advanced Practice Strategies
Relias Learning, provider of learning management systems for healthcare and public safety trainings, has acquired Advanced Practice Strategies (APS), an assessment, education, and analytics healthcare company. APS offers two assessment-based solutions, GNOSIS and Prophecy, which focus on building and improving patient care teams. Terms of the deal were not disclosed
GP Strategies Corporation Acquires Emantras
GP Strategies Corporation (NYSE:GPX), a customized training solutions provider, has acquired Emantras, a digital and mobile education solutions provider. Emantras offers consulting, m-learning, e-learning, and app development services, as well as mobile, safety, and learning solutions, to K-12 schools, higher education institutions, and for-profit companies. The company generated approximately $3.0 million of revenue in its last fiscal year. Terms of the deal were not disclosed Raises $12.0 Million has raised $12.0 million in a round of funding led by Redpoint Ventures and with participation from GSV Acceleration, First Round Capital, Owl Ventures, and SJF Ventures. provides an online service where higher education institutions award micro-scholarships to students for accomplishments throughout their high school career. The company aims to improve the ineffective, time-consuming process of applying for various scholarships at higher education institutions
Excelligence Learning Corporation Acquires Frog Street Press
Excelligence Learning Corporation has acquired Frog Street Press, a provider of educational materials and solutions for the early childhood market. Excelligence Learning provides educational tools and solutions to early childhood and elementary teachers and parents. This transaction follows Excelligence's acquisition of ChildCare Education Institute in March 2017. Terms of the deal were not disclosed
Legends of Learning Raises $9.0 Million
Legends of Learning, a game-based learning program developer, has raised $9.0 million in seed funding from undisclosed investors. The company's games apply to students in grades 5-9, span from 5 to 25 minutes in length, and address science subjects. Legends of Learning plans to use the proceeds to hire additional staff, expand its offerings to more grades, and increase its marketing efforts
MarcoPolo Learning Raises $8.5 Million 
MarcoPolo Learning, a developer of educational apps for kids, has raised $8.5 million in a round of funding led by Boat Rocker Media and with participation from Horizons Ventures, Seedcamp, and others. The company already serves more than 5 million children in over 150 countries. Its new partnership with Boat Rocker Media, a global media company, will lead to a wider distribution of its content
Eruditus Executive Education Raises $8.2 Million 
Bertelsmann, an international media, services, and education company, has invested $8.2 million in a Series B round of funding for Eruditus Executive Education, an Indian provider of executive education programs. Eruditus Executive Education partners with esteemed colleges and universities, such as Harvard University and MIT, to offer programs in India, Southeast Asia, and the Middle East
Beech Tree Private Equity Invests in Learnlight 
Learnlight, a language and skills training services provider to employees of businesses, has received a growth equity investment from Beech Tree Private Equity. The investment helped Learnlight fund two recent acquisitions. Learnlight acquired Communicaid and merged with Training Express, both corporate language training and learning services providers, in early April 2017. Terms of the deals were not disclosed
Smart Sparrow Raises $4.0 Million 
Smart Sparrow, an adaptive elearning platform provider, has raised $4.0 million in a round of funding from OneVentures, Uniseed, and Moelis Australia Asset Management. Online course instructors use Smart Sparrow's platform to create customized, interactive, and intelligent coursework that is designed to increase student engagement and feedback. Columbia University, Arizona State University, and Stanford University are only several of the institutions who have utilized the Smart Sparrow platform
Telegraph Media Group Acquires Gojimo 
Telegraph Media Group, a London-based newspaper publisher, has acquired Gojimo, developer of an exam preparation app. The company's app offers more than 65,000 practice questions for more than 20 subjects. As well as focusing on standard international exams, the app also offers preparation for the SAT, ACT, and AP courses in the U.S. Terms of the deal were not disclosed
TakeLessons Agrees to Acquire Chromatik 
TakeLessons, an online community for lifelong learning, has agreed to acquire Chromatik, a provider of digital sheet music and applications for music education. Chromatik's music education courses will add to a growing list of subjects offered by TakeLessons, which already include computer skills, language, performing arts, and more. Terms of the deal were not disclosed
The Learning House Acquires Advancement Courses and Learning House International 
The Learning House, an online education solutions provider that partners with higher education institutions to develop online degree programs, has acquired Advancement Courses, a provider of graduate-level continuing education courses for K-12 teachers. The company has also acquired Learning House International, a consulting and enrollment services provider for international students applying to American and British colleges and universities. Terms of the deals were not disclosed
CollegeVine Raises $3.6 Million 
CollegeVine, a provider of mentoring and consulting services to high school students during the college admissions process, raised an additional $3.6 million in its Series A round of funding. The round was led by Morning Technology Ventures and involved participation from Silicon Valley Bank and University Ventures. The new funding is an extension of its initial $3.1 million Series A round, which closed in November 2016
Endeavor Schools Acquires Montessori Academy of Cincinnati 
Endeavor Schools, an owner and operator of private schools, has acquired Montessori Academy of Cincinnati, a provider of childhood programs, elementary school, and middle school. Endeavor operates schools in California, Florida, Georgia, Minnesota, Nevada, North Carolina, Ohio, Oregon, and Texas. Terms of the deal were not disclosed
MC Monthly Commentary:

Embrace the future, I've heard people say, or it will pass you by. In the early 2000's, I was part of a meeting with a state association of superintendents, which was trying to decide how to respond to a new kind of competitor. A small rural school district had teamed up with a then early stage company called K12, Inc. (NYSE: LRN), to offer online education to all students in the state (where open enrollment is allowed). As you might guess, this new entrant went on to be the leader in online education in the state. Ultimately, the other districts did nothing. That isn't entirely fair - they were doing something. In fact they were working incredibly hard on their core mission of serving students and their community. But they did nothing to respond to the new threat (and as it turns out, the new opportunity), presented by online schools.

I couldn't help but think of this meeting when I heard that Purdue University was acquiring Kaplan. Granted there were already aggressive, innovative non-profit universities offering online education, such as Arizona State University. But a majority of postsecondary institutions are more focused on trying to improve their offerings at the margins, while for many of them enrollments are declining, and costs are continuing to grow.  It remains to be seen if the Higher Learning Commissions and the Department of Education will approve this acquisition. But something tells me this is one more step that will drive a decline in small rural colleges, and a move towards larger brand name institutions, with more flexible, accessible, and (hopefully) affordable offerings for students.

For a confidential conversation 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.
Education For-Profit 50 Index
For-profit education comprises more than 5% of the roughly $1.3 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.

Postsecondary Education
Training  and Development
Education Products and Services Providers
EV*/Revenue = 1.7x
EV*/Revenue = 1.0x
EV*/Revenue = 1.3x
EV*/Revenue = 1.4x
EV/EBITDA = 11.7x
EV/EBITDA = 8.3x
EV/EBITDA = 10.5x
EV/EBITDA = 11.3x
3-Yr Rev Gr = 0.7%
3-Yr Rev Gr = -2.3%
3-Yr Rev Gr = 5.5%
3-Yr Rev Gr = 0.2%
EBIT Margin = 12.9%
EBIT Margin = 7.1%
EBIT Margin = 4.5%
EBIT Margin = 3.4%

* EV= Enterprise Value

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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.