Cherry Tree & Associates | August 2021 | Volume XVI, Issue 2
McGraw Hill to Acquire Achieve3000 

McGraw Hill, fresh off its acquisition by Platinum Equity, has entered into a definitive agreement to acquire Achieve3000, a differentiated instruction provider for PreK-12 students. Achieve3000 was founded over 20 years ago in New Jersey, and funded by Insight Partners, and provides a learning platform that supports literacy, math, science, social studies, and English Language Arts.
The Apax Digital Fund Invests in Revolution Prep

Apax Partners, a principal investment firm specializing in direct and fund of fund investments in the middle-market, invested in Revolution Prep, an online education and tutoring services company helping students with college and private school admissions tests that include SAT, ACT, and PSAT test preparations. Revolution Prep plans to use the investment to further enhance its online learning platform and expand its offering to make professional tutors available to more students in the United States and beyond.
Adtalem Completes Acquisition of Walden University

Adtalem Global Education (NYSE:ATGE), a workforce solutions provider, acquired Walden University, an online healthcare and behavioral sciences education provider, from Laureate Education Inc. Given the anticipated nursing shortage, this transaction is estimated to better enhance Adtalem’s ability to address the rapidly growing and unmet demand for healthcare professionals in the U.S. through greater scale and a wider array of healthcare educational offerings. The combined organization is expected to have approximately $1.7 billion in revenue and $500 million in adjusted EBITDA (non-GAAP).
Udemy Acquires CorpU 

Udemy, a destination for learning and teaching online, acquired CorpU, an online leadership development platform that delivers cohort-based immersive learning experiences and access to world-class experts. CorpU enables global companies like CVS Health, BJ’s Wholesale Club, and Rite Aid to incorporate cohort-based learning scalable, virtual environments. Since its founding in 1997, CorpU claims to have delivered courses to over 16,000 cohorts, reaching over 160,000 participants around the globe.
Avathon Capital Invests in ReUp Education

Avathon Capital, an impact-oriented investment firm focused on the education and workforce management markets, has invested in ReUp Education, a company dedicated to helping re-enroll the over 36 million Americans who ceased enrollment before earning a degree. ReUp Education provides a personalized, tech-driven solution combined with a diverse team of coaches that has reportedly helped re-enroll over 16,000 students. As part of the new partnership, Avathon aims to accelerate areas like technology and engineering, digital marketing, learner experience, and data and analytics.
CeriFi Acquires Fast Forward Academy

CeriFi, an education and certification provider for the financial services market, acquired Fast Forward Academy, a provider of tax and accounting exam preparation. Founded in 2010, Fast Forward Academy helps candidates pass the Enrolled Agent (“EA”) and Certified Public Accountant (“CPA”) exams as well as other continuing education requirements. The acquisition of Fast Forward Academy represents the ninth acquisition by CeriFi, a portfolio company of Leeds Equity.
Graduway Acquires PeerPal

Graduway, the UK-based virtual community focused on recruiting and mentoring students, engaging alumni and volunteers, and cultivating donors, acquired PeerPal, a software provider that enables customers to leverage engagement between a school’s existing community with prospective families. PeerPal is headquartered in Austin, Texas, and trusted by schools and universities to power their admission ambassador program. It serves schools such as Bryn Mawr School, Pace Academy, Garrison Forest School, Philips Exeter Academy, Urban School of San Francisco and many more.
Achieve Partners Acquires Freedom Learning Group

Achieve Partners, an investment firm focused on cutting-edge technologies and novel business models that help bolster skill development, acquired Freedom Learning Group, an educational courseware and content provider powered by a global remote workforce of Military Spouses and Veterans. Freedom Learning Group focuses on educational development, instructional design, assessment writing, accessibility compliance, ADA accessibility, accuracy review, and other related services
Pluribus Technologies Acquires Pathways Training & eLearning Inc.

Pluribus Technologies Inc., an investment firm founded in 2018 with the goal of consolidating the smaller players in the B2B software industry, acquired Pathways Training & eLearning Inc., an agency that supports its blue-chip clients through the design and programming of learning technologies. The Toronto-based learning and developing company represents Pluribus Technologies’ fifth acquisition in the eLearning vertical.
Endeavor Schools Acquires Heritage Montessori

Endeavor Schools, an education management company with a wide range of unique schools across the nation, acquired Heritage Montessori, one of the first Montessori schools in the United States. Today, Heritage Montessori has three locations, including Huntington Beach, Lake Forest, and Newport-Mesa. With the addition of Heritage Montessori’s three campuses, Endeavor Schools now owns and operates 64 schools across the United States, including six in Southern California.
Academic Partnerships Acquires Coursetune

Academic Partnerships, an online facilitator for affordable higher education, acquired Coursetune Inc., an EdTech provider of curriculum mapping software. The acquisition was driven by the companies’ shared goals to provide best-in-class curriculum design capabilities for faculty, increase collaboration and improve student outcomes. Coursetune’s software helps university and faculty demonstrate that courses and programs are mapped appropriately to the institution’s overarching workforce, regulatory and programmatic goals.
GoGuardian Raises $200 Million 

GoGuardian, the edtech company providing classroom management and enhanced student assessments to K-12 districts, announced a $200 million strategic investment from Tiger Global Management. The Company reported 60% growth in customer base, to over 10,000 schools, including 23 of the top 25 largest U.S. districts following the rise in remote and hybrid instruction. The recent raise, which values GoGuardian at well over $1 billion, positions the Company to accelerate its mission to create more productive, effective, and safe digital learning experiences for schools worldwide.
Novakid Raises $35 Million

NovaKid, the EdTech startup offering virtual-only English language immersion for kids between the ages of four and twelve, raised a $35 million Series B financing round led by Owl Ventures and Goodwater Capital, with participation from several existing investors. The Company reportedly grew its client base 350% year over year, reaching over 50,000 paying students.
Product School Raises $25 Million 

Product School, a training and certification provider for individuals and companies, secured $25 million in growth equity investment from Leeds Illuminate. The Company was incubated as a solution to the traditional MBA programs that can be costly, lengthy, and sometimes lack the application of real-world skills. The Company says it has experienced an increase of business since COVID as many people worked remotely. It reports that Google, Facebook, Netflix, Airbnb, PayPal, Uber, and Amazon are among its many customers.
Yellowbrick Secures Investment from Sony Innovation Fund, Acquires Animation Mentor 

Yellowbrick, a global company focused on online education and career exploration, received funding from Innovation Growth Ventures (IGV), a venture capital firm formed in 2019 by Sony Corporation, Daiwa Capital Holdings Co., Ltd. and external limited partners. Additionally, the Company announced the acquisition of Animation Mentor, an online animation school that teaches students character animation skills. The two strategic moves represent a greater vision at cementing the Company’s position as an education platform for the creative economy, which is estimated to be $104.2 billion and growing.
CDPQ Invests in ApplyBoard

Caisse de dépôt et placement du Québec (CDPQ), a global investment group, announced a minority investment in ApplyBoard as part of its $300 million Series D funding round. ApplyBoard provides a simplifying study abroad search, application and acceptance process to students in more than 1,500 institutions across Canada, Australia, the United Kingdom and the United States. The Company has reportedly helped more than 200,000 students from more than 125 countries since 2015.
Clearlake Capital Group to Acquire Cornerstone OnDemand  

Cornerstone OnDemand, Inc. (NASDAQ:CSOD), a global talent management SaaS provider, has entered into a definitive agreement to be acquired by Clearlake Capital Group, L.P., a private equity firm focused on the technology, industrial, and consumer sectors. Under the terms, Clearlake will acquire the outstanding shares of Cornerstone’s common stock for $57.50 per share in cash, or $5.2 billion. The current price represents a premium of approximately 31% to Cornerstone’s unaffected closing stock price on June 1, 2021.
APEI to Acquire Graduate School USA

American Public Education, Inc (Nasdaq:APEI), a higher learning provider supporting affordable academic programs and services to students, universities and partner organizations, acquired Graduate School USA (“GSUSA”), a provider of training to the federal government. FSUSA’s extensive portfolio of government agency contracts and customers is tightly aligned to APEI’s focus on “Education those who Serve” and represents a strong adjacency to American Public University System’s (APUS) core military and veteran student populations. The acquisition is expected to further advance APEI’s focus on career training and degrees that help provide pathways to employment and career advancement.
EAB Acquires Seramount 

EAB, a provider of educational research, technology and enrollment solutions, acquired Seramount from Bonnier Corp. Seramount is known for being one of the largest providers of diversity, equity, and inclusion (DE&I) services. It claims to serve more than 450 companies, including half of the fortune 100.
Knowfully Learning Group Acquires ChiroCredit

Knowfully Learning Group, a Nexphase capital-backed company and provider of continuing education, exam preparation courses and digital learning solutions to the accounting, finance, and healthcare sectors, acquired ChiroCredit, a provider of continuing education for chiropractors and other healthcare professionals. ChiroCredit will join KnowFully’s PharmCon division, an online continuing education platform that has served pharmacists, pharmacy technicians, nurses and other healthcare providers for over 30 years.
Course Hero Acquires CliffsNotes

Course Hero, an online learning platform offering more than 60 million course-specific study resources, acquired CliffsNotes, the creator of the iconic study guides that have been used by high school and college students for more than 60 years. Founded in 1958, CliffsNotes reports receiving over 64 million visits annually to access its free online literature guides and test prep guides that cover a wide range of subject areas. In addition to CliffsNotes, Course Hero is also acquiring QuillBot, an AI-powered platform used to improve people’s writing skills. This announcement comes after Course Hero’s recent acquisition of LitCharts, a system used by students and teachers to develop a better understanding of literary texts.
Serent Capital Invests in ParentSquare

ParentSquare, a unified school-to-home engagement platform for K-12 markets, has received a significant investment from Serent Capital, a growth-focused investment firm that invests in technology and tech-enabled services companies. Serent plans to support ParentSquare’s growth by deploying resources to scale the new customer acquisition engine, invest behind existing customer success, and explore new opportunities to bring adjacent solutions to the customer base. ParentSquare claims to serve thousands of schools and millions of parents, students and staff across 44 states.
Linq Acquires Alio and eGrants 

EMS LINQ, a K-12 technology company in the U.S. has completed two acquisitions. First, its acquired Alio, a platform used by administrators to effectively manage finances and people across an entire district. Secondly, its acquired eGrants, a cloud-hosted management software platform for state organizations. The acquisitions represent Linq’s aim to expand its product offerings to streamline both financial and grant management for school districts.
Altus Assessments Acquires One45

Altus Assessments, a research-backed admissions assessments provider, acquired One45, a MedED software platform that provides medical schools with the operational tools and end-to-end data analytics they need to run programs and train doctors. Since being founded in 2001, One45 claims to have served over 100 medical schools worldwide.
Top Hat Acquires Morton Publishing Company

Top Hat, a customizable teaching and learning platform for higher education, has acquired Morton Publishing Company, an independent press that specializes in educational content for the sciences. The acquisition includes more than 600 labs and course materials that are being converted into customizable digital courseware on Top Hat’s platform. The acquisition comes after its $130 million Series E funding round that the Company sought to drive the shift from traditional textbooks to digital interactive course materials.
Eagle Point Software Acquires KnowledgeSmart

Eagle Point Software, the developer of the Pinnacle Series AEC e-learning system, acquired knowledgeSmart, a company that delivers skills gap analysis and benchmarking services to help AEC firms maximize their return on investment in technology. KnowledgeSmart’s e-learning system features a comprehensive library of videos, documents, and other development resources that enables long-term employee training and on-demand problem-solving.
Hachette Book Group to Acquire Workman Publishing

Hachette Book Group, a trade publisher based in New York and a division of Hachette Libre, announced it has entered into a binding commitment to acquire Workman, one of the largest independently owned book publishers in the US. Workman publishes award-winning children’s books, cookbooks, parenting guides and others. The transaction is expected to close after regulatory approval is received.
Crehana Raises $70 Million

Crehana, the Peru-native edtech startup, raised $70 million in the largest Series B round in Latin America, led by General Atlantic. The most recent raise, which is dedicated to supporting the Company’s expansion strategy, comes months after the Company raised a $13 million Series A extension round. The startup works with more than 400 experts and claims to offer over 700 courses that teach thousands of techniques and skills.
NoRedInk Raises $50M 

NoRedInk, a digital writing curriculum, raised $50 million in a Series B funding round, led by Susquehanna Growth Equity and with participation from True Ventures. NoRedInk’s adaptive writing curriculum engages students with exercises based on their interests, guides them through the writing process with instructional support, and boosts their skills through targeted practice. The Company claims to serve students in over 60% of U.S. school districts.
Kiddom Raises $35 Million

Kiddom, a platform offering a digital curriculum that fits the core standard required by states, raised a $35 million Series C round led by Altos Ventures, with participation from Owl Ventures, Khosla Ventures and Outcomes Collective. The financing comes nearly three years after Kiddom’s Series B, a $15 million round led by Owl Ventures. Kiddom has stated that from 2020 to 2021, annual recurring revenue (“ARR”) growth is on track to be 300%.
Stukent Receives Growth Investment from Tritium Partners  

Stukent, a provider of digital courseware and simulations for real-world learning experiences, received a strategic growth investment from Tritium Partners, a private equity firm focused on technology and services companies. The investment will be targeted toward accelerating the EdTech company’s plan for new learning simulations and courseware expansion. With the investment, Stukent plans to add more than 100 new jobs after creating over 120 in the last few years, mostly in eastern Idaho.
Veeva Acquires Learnaboutgmp

Veeva Systems (NYSE:VEEV), a global cloud software provider for the life science industry, acquired Learnaboutgmp, a provider of accredited GxP training for life sciences. With more than 170 course titles and over 450 microlearning assets, Learnaboutgmp delivers a comprehensive eLearning library to help organizations develop learning programs that aim to reduce costs while improving training outcomes. Learnaboutgmp will remain headquartered in Ireland and operate as an independent business unit under its founder and CEO, Graham O’Keeffe.
Camp K12 Raises $12M 

Camp K12, a provider of coding and extra-curricular classes for K-12 students through live, interactive, and gamified online sessions, raised $12 million in a Series A funding round, led by Matrix and Elevation Capital. Camp K12 plans to use the funds to foray into two new geographies and deepen its reach in existing ones by introducing a group class learning format.
For-profit education comprises more than 5% of the roughly $1.5 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
As many of our readers know, the education market is a significant part of Cherry Tree’s 40-year history. That history includes starting in the venture capital/private equity space, where we were founding investors in companies such as Capella Education Company and PLATO Learning (now Edmentum) in the early 90’s. Since the early 2000’s, Cherry Tree has grown into a middle-market investment bank with education as a key focus, working with exciting education technology leaders including Flipgrid/Microsoft, Fastbridge/Illuminate, Carnegie Learning/Scientific Learning, and Tierney/Trox. After several of our team members attended the ASU-GSV conference in San Diego, we spent some time taking a step back and thinking about all that we’ve seen, and been a part of, over these four decades.

As alluded to last month, the K-12 market is as dynamic and diverse as we have ever seen it. We see three factors driving this: 1) the digitization driving rapid cycles of innovation and personalization; 2) the tremendous amount of investment capital being applied, and the public sector funds, and; 3) COVID accelerating the pace of change by several years. The experience of the last year has been challenging in many respects, but there is good that is coming out of it. There is tremendous public investment taking place, and more proposals are being debated to further expand investments in K-12. Meanwhile, districts are learning what truly works and what doesn’t when it comes to technology in education. 

In adult education, the most interesting things are happening outside of (or adjacent to) the degreed education space. The job market in a knowledge economy will require constant upskilling and that is changing the education-to-employment value chain. Instead of a linear one-time progression from education into the workforce; it is becoming a series of loops that will have to be less costly and faster than traditional degree programs. This creates an opportunity for new thinking and innovation within universities and outside of them in non-degree programs and corporate learning. 

Last year was our 40th year and in many ways our best year ever. We primarily advise on sell-side and buy-side M&A transactions, and we do a number of institutional capital/growth equity deals as well. In addition to education, we advise clients in IT services, technology-enabled business services, consumer products, and various industrial markets. (And we should add, we’re growing our team of managing directors, so please let us know if you have a great candidate!) With all of this, education continues to be a primary point of emphasis for us, and the segment where we invest the most time, energy, and resources. We look forward to all of the clients we’ll work with in the coming decades and the personal and business goals we’ll help them achieve, not to mention witnessing all of the innovation and positive outcomes they’ll no doubt contribute to. 

For a confidential discussion 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 Partner | 952.253.6010
Follow me on Twitter @ChadEricJohnson
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.