Cherry Tree & Associates | August 2019 | Volume XIV, Issue 2
Cambium Learning Group to acquire the Assessment Division of the American Institutes for Research

Cambium Learning Group, a provider in education software, has announced that it will acquire AIR Assessment. AIR Assessment leads the nation with technology that measures student progress and provides educators and families with pertinent information about teaching and learning. The transaction will be subject to regulatory review before officially closing.
PCG to Acquire Script

Public Consulting Group, PCG, a Boston MA based firm, has announced that it will acquire Script. Script is a provider of digital special education tools that are expected to complement PCG existing platform. PCG is a provider of operation improvements for public agencies and has 2,500 professionals in over 60 offices worldwide
Kaplan to Acquire the Healthcare Assets of Becker Professional Education 

Becker, a subsidiary of Adtalem Global Education, and leading global workforce solutions provider has entered into an agreement to provide USMLE review programs to Kaplan’s medical schools. Kaplan is a provider of educational and career services. This transaction is expected to expand Kaplan’s commitment to the healthcare and education space.
Conn Education to Acquire Novel Units

Conn Education, a provider of educational materials and technology services in preK-12 classrooms, has announced an acquisition of Novel Units. Novel is a Texas-based provider of lesson plans other K-12 material for teaching and reading.
Absorb Software to Acquire eLogic Learning

Absorb Software, an Alberta-based provider of LMS has announced the acquisition of eLogic Learning. eLogic Learning is an award-winning LMS located in Florida. The acquisition is expected to help Absorb accelerate their growth trajectory and give them the global positioning they need to expand their client base.
Pathstream Raises $12 Million 

Pathstream, a startup that creates education programs for universities and colleges in partnership with Silicon Valley technology firms, has raised $12 million in series A funding. The Series A round included several investors, such as TDM Partners, Hereditas Capital Management, Bisk Ventures, New Ground Ventures, and Rethink Education.
MEL Science Raises $6 Million  

The startup, MEL Science, has raised $6 million in funding in a recent round led by TMT investments, with Sistema Venture Capital and Yandex participating. MEL Science has raised $12 million to-date and provides VR lessons that educate students in the subjects of chemistry and physics.
Crimson Education Raises $5 Million in Capital at a $245 Million Valuation

Crimson Education, a New Zealand-based company, provides technology and consulting platforms that help students select top schools and identify what the academic requirements are to get in. The company raised $5 million at a valuation of $245 million from Solborn Investment, a Korean holding company. The company has raised $42 million in funding to date.
littleBits to be Acquired by Sphero

littleBits, a New York City-based company that create electronic kits and instruction resources for kids that introduces them to programming by hand, has announced that it will be acquired by Sphero. Sphero is a robotic toymaker focused on the education market. The acquisition will help enhance Sphero robotic education offering to schools and educational programs .
Forecast5 Acquires

Forecast5, a provider of services that empowers local government leaders with the required tools to analyze financial, student, and organizational performance, has announced an acquisition of is a provider of decision support and planning tools for K-12 school districts in Minnesota.
Perennial EdTech to be Acquired by Frontline Education

Perennial EdTech, a group of market leading education software companies that reportedly service 8 million students through over 1,700 clients, has been acquired by Frontline Education. Frontline is a provider of integrated solutions for K-12 organization that connect departments within an organization. The solutions provided by Perennial are expected to enhance Frontline’s platform and prove additional value and connectivity for educators and administrators .
K1 investment in Graduway  

Graduway, a global provider of alumni engagement and career services management software, has received an investment from K1 Investment Management. K1 is an investment firm that specializes on high-growth enterprise software companies. The investment is expected to provide Graduway with the necessary resources to accelerate growth and innovation as it expands its product suite.
Coursera Acquires Rhyme Softworks

Coursera, an online education platform, has announced its acquisition of Rhyme Softworks. Rhyme is a startup that has developed a platform that lets developers build hands-on virtual e-learning projects that can be executed from a user’s internet browser.  This is the first acquisition performed by Coursera and is expected to compliment its existing hands-on learning projects.
Kids Code Jeunesse Raises $8.1 Million

Kids Code Jeunesse, a Montreal-based non-profit that educates children in coding, has received $8.1 million through an investment from the federal government. The company will provide 415,000 coding and digital skills training opportunities to K-12 students.
Codecombat, an education platform that teaches students coding skills through games, has announced the completion of a $6 million funding round. The round was led by Hone Capital, and included several other firms, such as Andreessen Horowitz, Extol Capital, and OceanOne Capital.
CourseKey Raises $5 Million in Series A

CourseKey, a startup providing software tools that allowed professors to take attendance without a manual roll call, has raised $5 million in funding. The round was led by Builders VC and included Entangled Ventures, Bisk Ventures, and Social Startups Limited Partners. This round brings CourseKey’s total funding to-date to $9 million.
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.
* EV= Enterprise Value
Readers this month will notice that STEM-related companies in all education markets continue to see investment and acquisition interest. Whether you look at littlebits being acquired with their solutions for teaching children robotics, or Pathstream raising venture capital funding to help involve technology companies in building higher ed programs, STEM-related companies continue to see strong interest.

And it only makes sense. As technology transforms most industries in the U.S. and the world, educational institutions and society at large recognize the need to increase the teaching of 21st century skills. Hopefully we don't lose sight of the fact that many of the skills our workforce needs have been important for centuries. The M in STEM does stand for mathematics, after all. But there is no doubt that companies who can help education institutions better serve their students, their surrounding economy, and society at large, have increased opportunities to sell their solutions. And will likely to see increased interest from buyers and investors.
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

Prepared by:
Chad Johnson, Managing Director and Partner | 952.253.6010

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis. Our firm specializes in serving middle market companies and their owners, whether private, public, or divisions of larger corporations.
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.