February 2017
Volume XI, Issue 8
Francisco Partners Acquires myON
Francisco Partners has acquired myON, a K-12 digital literacy platform, as a carve-out stand alone business from Capstone, a Minnesota-based children's books and digital products publisher. myON offers personalized learning solutions along with a library of more than 13,000 digital books from dozens of publishers, to a user base of more than 7.5 million students. Terms of the deal were not disclosed
Private Equity Consortium Acquires Apollo Education Group
The Vistria Group, in consortium with Najafi Companies and Apollo Global Management (NYSE:APO), has completed its acquisition of Apollo Education Group, a for-profit postsecondary education provider. The private equity consortium acquired the company for $1.1 billion (0.2x EV/Rev., 2.0x EV/EBITDA). The transaction was first announced in February 2016
Veronis Suhler Stevenson Invests in VKidz
Veronis Suhler Stevenson, a New York-based private equity firm, has invested an undisclosed sum for a minority position in VKidz, a provider of curriculum and supplementary programs to homeschool families and elementary schools. VKidz's homeschool division offers two programs, Time4Learning and Time4Writing, and the elementary school division also offers two programs, VocabularySpellingCity and Science4Us. Terms of the deal were not disclosed
Top Hat Raises $22.5 Million  
Top Hat, provider of a student engagement and interactive teaching platform, has raised $22.5 million at a valuation of $185 million in a Series C funding round from Union Square Ventures, Emergence Capital Partners, iNovia Partners, and others. The company plans to use the proceeds to develop digital solutions for the creation and distribution of educational content, placing it in direct competition with traditional textbook providers
ST Unitas Acquired The Princeton Review
ST Unitas, a Korean private learning institutes operator, has announced its acquisition of The Princeton Review, a leading provider of college entrance exam preparation services. Founded in 2010, ST Unitas has quickly grown to become the largest education firm in South Korea. Terms of the deal were not disclosed, although unnamed investment banking analysts stated ST Unitas paid approximately $87 million for control of the company
RM Plc Announces Acquisition of Connect Group's Education & Care Division
RM Plc (LSE:RM), a provider of IT software and IT services to the education sector, has announced the acquisition of Connect Group's Education & Care Division, which provides educational supplies in Great Britain and internationally, for approximately $80 million (1.0x EV/Rev., 7.2x EV/EBITDA). Connect Group (LSE:CNCT) decided to sell the unit after disappointing financial results in 2016 and an internal decision to invest in higher growth opportunities
Hobsons Acquires RepVisits
Hobsons, a London-based developer of education technology solutions, has acquired RepVisits, operator of a website that connects high schools with college admission reps. The company claims its service is used by over 11,000 users at 1,600 high schools. RepVisits will be integrated into Hobsons' college and career readiness platform, Naviance, later this year. Terms of the deal were not disclosed
CampusLogic Acquires Cegment
CampusLogic, a student financial aid engagement platform provider, has acquired Cegment, a provider of student financial aid assessment products. CampusLogic claims that financial aid and enrollment offices have stated that its platform has increased financial aid completion rates by more than 5% and decreased the cost of financial aid administration by more than 60%. Terms of the deal were not disclosed
VitalSource Technologies Announces Acquisition of Verba Software
VitalSource Technologies, an Ingram Content Group subsidiary, has announced it has signed a Letter of Intent with Verba Software, a company focused on increasing textbook affordability through transparency and competition. Verba Software claims to have more than 3 million student shoppers each term. Terms of the deal
Harris School Solutions Acquires Quintessential School Systems
Harris School Systems, provider of a full suite of education software solutions, has acquired Quintessential School Systems, a provider of administrative software and consulting services for the K-12 market. Harris School Systems hopes the transaction leads to a stronger presence in California, a state with several of the largest school districts in the U.S. Terms of the deal were not disclosed
Brightwheel Raises $10.0 Million
Brightwheel, provider of an early education communication platform, has raised $10 million in Series A funding led by GGV Capital with participation from Chan Zuckerberg Initiative, Golden Venture Partners, and others. Brightwheel gained national attention in 2016 when Mark Cuban and Chris Sacca each invested $300,000 on ABC's hit show, Shark Tank. The company plans to use the Series A proceeds on developing its product and expanding its team
WayUp Announces its Acquisiton of Looksharp
WayUp, formerly known as Campus Job, has announced it will acquire Looksharp, provider of an online internship and job marketplace for college students. WayUp has quickly grown to become a leader in the job placement market, largely due to its strong reputation and results. The company claims that 23% of job applications on its site result in an interview, which is much higher than the industry standard. Terms of the deal were not disclosed Raises $5.5 Million, developer of a peer-to-peer knowledge creation and sharing platform, has raised $5.5 million in a Series A funding round led by Notion Capital and Hong Leong Group. claims its platform currently hosts more than 150,000 users. The company plans to use the proceeds to further develop its platform
Learning Care Group Acquires Creative Kids Learning Center
Learning Care Group, a provider of early education and care services, has acquired Creative Kids Learning Center, a Las Vegas-based child care centers operator. Creative Kids Learning Center will add to Learning Care Group's existing portfolio of more than 900 schools. Terms of the deal were not disclosed
The Holberton School Raises $2.3 Million 
The Holberton School has raised $2.3 million in a round of funding led by daphni SAS with participation from Insight Venture Partners, Reach Capital, Partech International, and others. The Holberton School offers a two-year higher education program to become a software engineer. The company requires graduates to pay 17% of their gross salaries back to Holberton over three years, rather than charging for tuition
Tenka Labs Raises $2.1 Million 
Tenka Labs, developer of innovative STEM toys for ages 8 and up, has raised $2.1 million in seed funding. Tenka Labs' first product, Circuit Cubes, are three electronic building blocks, a battery, motor, and LED cube, and can connect to Lego bricks. The company plans to use the proceeds for its launch
MC Monthly Commentary:

We've opined in the past few years on the importance of teaching 21st century skills. This month, we'll focus on a very important and foundational element of those skills; STEM.

Most of you know that STEM stands for Science, Technology, Engineering, and Mathematics. Variations on the them may include STEAM (adding Art), and even STREAM (adding Religion and Art, in parochial schools). To truly implement education relevant to the 21st century, forward thinking schools are investing in programs that go beyond science in silos, or mathematics without the context of real world problem solving. They are integrating multi-disciplinary curricula, integrating the technology students already use (and already use more proficiently than adults, for the most part). And most importantly they are implementing engaging and student-centered STEM programs, that while academically rich, allow children to explore while they learn. This teaches them the true 21st century skills: critical thinking, problem solving, collaboration, communication, and project management.

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 = 1.2x
EV*/Revenue = 1.0x
EV*/Revenue = 1.5x
EV*/Revenue = 1.5x
EV/EBITDA = 11.4x
EV/EBITDA = 6.7x
EV/EBITDA = 11.8x
EV/EBITDA = 13.3x
3-Yr Rev Gr = 9.9%
3-Yr Rev Gr = -2.3%
3-Yr Rev Gr = 5.9%
3-Yr Rev Gr = 0.2%
EBIT Margin = 8.9%
EBIT Margin = 6.5%
EBIT Margin = 6.7%
EBIT Margin = 2.3%

* 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.