Valuations continue to moderate in the education M&A markets, as they have in the broader M&A world. As we look back on 2016, it was clear that valuations have come down from late 2014 to mid 2015 levels. This is being seen in M&A markets as a whole, and largely reflects the tension between buyers being more careful, while still sitting on large amounts of cash they want to put to work.

To be clear, education company valuations are still healthy. The median education M&A transaction in the sectors we follow, was 11.8x EBITDA and 1.6x revenue in 2016, down from 15x and 3.0x respectively in 2014. Double digit EBITDA multiples are nothing to sneeze at, despite the decrease. Certainly a few larger tech deals help drive the numbers higher, and not every business should expect the same multiple. As we always caution our readers, many variables factor in. These include but are not limited to print vs. digital business models, recurring revenue, size, management team experience, and broader market sentiment.