Cherry Tree & Associates | February 2019 | Volume XIII, Issue 8

SELECTED NEWS

Pearson Selling its K12 Courseware Business for $250 Million  Pearson announced it is selling its U.S. curriculum and instructional materials business to a Nexus Capital, a California-based investment firm. Nexus is paying $250 million for the business in a structure that entails a $25 million upfront cash payment and an unconditional vendor note of $225 million to be repaid over 3-7 years.  Read more marketbrief.edweek.org TAL Education Group Acquires Ready4 Beijing-based TAL Education Group, acquired Ready4, an AI-powered online test prep and admissions services company. Ready4 reports having helped more than 2 million students in over 150 countries improve their college admissions test scores. Read more prnewswire.com Microsoft Acquires DataSense DataSense, a data management platform that is used across a range of education applications, has been acquired by Microsoft. DataSense, which had previously owned by BrightBytes, reportedly manages data for millions of students across hundreds of school districts. Read more venturebeat.com Instructure to Acquire Portfolium  Instructure, the education SaaS company, announced its plans to acquire Portfolium, a student network that showcases the achievements, projects and competencies to students to potential employers. Portfolium claims to have helped millions of students from more than 3,600 academic institutions.  Read more prnewswire.com Ardian Acquires Study Group Ardian, a global investment company, acquired Study Group, a provider of international education in the UK, Europe, Australia, New Zealand and North America that reports serving around 30,000 students from 142 countries. Study Group had previously been owned by Providence Equity Partners. Read more provequity.com Jamf Acquires ZuluDesk  Jamf, a provider of IT tools allowing organizations to utilize Apple products, acquired ZuluDesk, an education technology solution utilizing Apple products. ZuluDesk reportedly provides more than 6,000 schools with its purpose-built solutions and Jamf reports it has 20,000 global customers and manages more than 12 million Apple devices.  Read more globenewswire.com EdCast Acquires Leapest EdCast, a learning platform used by large enterprises, acquired Leapest a provider of integrated training resources. Leapest reportedly has 1,600 enterprise customers from more than 100 countries. Read more www.businesswire.com Allovue Raises $4 Million Allovue, provider of finance tools that help K-12 school districts and state education agencies manage their budgets, raised $4 million in series A funding led by Macquarie Capital.  Read more edsurge.com

Weld North Education Acquires Glynlyon  Glynlyon, a digital curriculum company claiming to serve over 1 million students, has been acquired by Weld North Education, a pre K-12 digital curriculum company. Glynlyon, formerly a portfolio company of Linsalata Capital Partners, will join Weld North’s portfolio of existing digital education companies, Edgenuity and Imagine Learning. Read more prnewswire.com Penn Foster Acquires Ashworth College Penn Foster acquired Ashworth College, an accredited online institution offering degree and certificate programs in fast-growing fields. Ashworth College reports having 145 career-focused programs in healthcare, technology, business, creative services, education, legal studies and trades. Read more prnewswire.com Quad Partners Acquires SchoolAdmin  Education focused private equity firm, Quad Partners, acquired a majority stake in SchoolAdmin, a provider of admissions and enrollment software for K-12 schools.  Read more prnewswire.com Google’s Gradient Ventures Invests in Elsa Google’s Gradient Ventures, its dedicated AI fund, led a $7 million Series A round for Elsa, an English language learning application used in Asia. The application reports having users in more than 100 countries, with Vietnam as its top market. Read more techcrunch.com Project Management Academy Acquires Watermark Learning Project Management Academy acquired Watermark learning, a provider of business analysis, project management and process improvement training. Project Management Academy, a portfolio company of Leeds Equity Partners, is a provider of learning and development solutions and reports serving 10,000+ professionals each year.  Read more prnewswire.com SchoolMint Acquires SureWatch SchoolMint, previously known as EdTech Holdings, has acquired SureWatch, a provider of campus management and student safety solutions. SchoolMint reports serving over 4 million students and more than 10,000 schools. Read more www.businesswire.com Investcorp Acquires Revature  Revature, a technology talent development company, has been acquired by Investcorp, an alternative investment firm. Revature offers no-cost coding immersion programs to university graduates and talent acquisition services for business enterprises.  Read more prnewswire.com ClassTag Raises $2 Million  ClassTag, an app-based communication service for parents and teachers, raised $2 million in a seed round led by Founder Collective, Newark Venture Partners, One Way Ventures, Silicon Badia and Smart Hub.  Read more edsurge.com

CHERRY TREE 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.

* EV= Enterprise Value

MONTHLY COMMENTARY

At this time of year many people are preparing their taxes, or at least preparing for a visit to their tax preparer. As you collect the relvent documents, you may find yourself cleaning out piles of old mail, shredding credit card statements, and generally organizing (or trying to organize) things as you put 2018 behind you. This month I offer some tips that might just pay dividends down the road, if not in 2019. A few years ago, one of my colleagues wrote a series of Research Reports entitled, Maximizing Your Gain , and one in particular was subtitled, Preparing for Exit . Spoiler Alert: the best time to prepare is years in advance! If you’ve been through it before, you know that the diligence process especially is draining and can be downright painful (another banker I know affectionately refers to it as brain damage ). But there are things you can do now, to make it less so. And buyers generally are willing to pay more for a business that appears to be highly organized, so that your statements and projections have more credibility, and so there is less potential for surprises. Having regular audits done is one example of a step you can take that will often save you time and money in the future. So are creating an electronic filing system for all of your important documents, ensuring you have all of the documentation related to intellectual property, and knowing which contracts are or are not freely assignable. Not to mention making sure you have thought through personnel needs and issues as warranted by your personal goals. And did I mention finding an experienced advisor to guide you through the process?

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 cjohnson@cherrytree.com | 952.253.6010 www.cherrytree.com 

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.

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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.