Cherry Tree & Associates | January 2023 | Volume XVI, Issue 7

SELECTED NEWS

7 Mindsets Acquires xSEL Labs and...

7 Mindsets, a provider of PreK-12 mindsets-based learning and well-being solutions, acquired xSEL Labs, a creator of scalable systems to assess and address the social and emotional needs of children. xSEL Labs’ core assessments directly measure students’ social and emotional needs and provides educators with actionable insights to improve student outcomes. The Company also offers brief climate surveys and educator surveys.

Cherry Tree and Associates served as xSEL Labs’ exclusive investment banking advisor in the transaction.

globenewswire.com

... Acquires BASE Education

7 Mindsets acquired BASE Education, a SEL and mental health platform. BASE Education’s platform was developed by licensed professional counselors in 2014. The acquisition is expected to expand and enhance 7 Mindsets’ suite of social-emotional well-being offerings for students, educators, and families.

globenewswire.com

HMH to Acquire NWEA

HMH and NWEA announced they have signed an agreement for HMH to acquire the not-for-profit research and educational services organization that serves K-12 students. NWEA’s flagship assessment, MAP Growth will remain under the NWEA brand while its assessment solutions are expected to be integrated within HMH’s platform. HMH expects the acquisition to deliver a holistic solution that provides insight on student growth to teachers.

prnewswire.com

CareAcademy Acquires Assets of NextStep

CareAcademy, a care enablement platform for home care and health organizations, acquired the assets of NextStep, a digital healthcare training and job placement company for certified nursing assistants (CNAs). CareAcademy acquired the Company’s video-based content and learning management technology to expand its portfolio of training solutions. CareAcademy reports that more than 350,000 learners have completed over 2 million classes with its platform.

businesswire.com

Noodle Acquires Hubble Studios

Noodle has marked its entry into the international market with the acquisition of Hubble Studios after first partnering with the firm in 2021. Noodle is an online education network of universities, employers, and learners and it expects to benefit from Hubble Studios e-learning design experience. The acquisition is expected to allow Noodle to scale to seven more countries.

prnewswire.com

Hilbert College to acquire Valley College

Hilbert College has announced plans to acquire the for-profit West Virginia and Ohio-based Valley College. The for-profit college specializes in allied health and health science programs. Together, Hilbert College expects to serve more than 2,000 students once the acquisition is complete. The colleges are expected to operate independently under a new nonprofit entity called Franciscan Services. The acquisition of Valley College is subject to state, federal and accreditor approval.

highereddive.com

DW Healthcare Partners Invests in Med Learning Group

DW Healthcare Partners, a healthcare-focused private equity firm completed an investment in Med Learning Group (MLG). MLG, previously a division of Ultimate Medical Academy, is a medical education company that holds an Accreditation with ACCME. MLG focuses on creating, delivering, and measuring online and in-person continuing education. This is DW Healthcare Partners’ eighth investment in Fund V.

prnewswire.com

Gemba Raises $18 Million

Gemba, an enterprise-focused virtual reality training company, has raised $18 million in a Series A round of funding. The round was led by New York-based Venture Capital. Gemba delivers “masterclasses” to its customers in subject areas like supply chain management and lean manufacturing using an immersive and interactive virtual reality setup. The Company was founded in 2010 as an executive training company called The Leadership Network but rebranded to Gemba in April 2022 to transition away from its legacy business.

techcrunch.com

Schola Secures $10 Million in Series A Round

Schola, an edtech SaaS company that matches families with ideal PK-12 schools for their children, closed on a $10 million Series A funding round. The round was led by Channel Equity Partners with participation from Arizona Venture Development Corp, Revolution’s Rise of the Rest, EduLab, Stout Street, and Portfolia. The investment is slated to accelerate its nationwide expansion through additional team members and expanding its platform.

globenewswire.com

Learning.com Acquires Codesters and Vidcode

Learning.com has acquired Codesters, an online platform and coding curriculum provider, to strengthen its position as a provider of comprehensive digital literacy and computer science curriculum for K-12 schools. The acquisition also included Vidcode, a coding curriculum platform, that was acquired by Codesters in 2021. Learning.com claims to partner with 10% of school districts in the U.S. and serve 1.6 million students annually.

Cherry Tree served as Vidcode’s exclusive investment banking advisor in its previously undisclosed merger with Codesters

learning.com

HealthStream Acquires Electronic Education Documentation System “eeds” for $7 Million

HealthStream has acquired eeds to expand its offerings of workforce and provider solutions with a SaaS-based continuing education management system for approximately $7 million. eeds is a North Carolina-based healthcare technology company that offers a platform for healthcare organizations to streamline its continuing education processes. eeds is HealthStream’s third acquisition since December 2021.

prnewswire.com

Higher Education Association Acquires SoFlo SAT Tutoring

Higher Education Association has acquired the online SAT and ACT preparation company, SoFlo SAT Tutoring. Found in 2019, SoFlo claims to teach over 2,000 annually, with more than 100 tutors. Higher Education Association also owns and operates EdMD, which assists students with college applications, essays, and financial aid forms. It uses its profits to self-fund its 501(c)(3) nonprofit to provide services to students who ordinarily would not be able to afford them.

prnewswire.com

ParentSquare Acquires Gabbart Communication

ParentSquare, developer of a school-home engagement platform for the K-12 market, acquired Gabbart Communications, a website and content management system business. With the acquisition, ParentSquare plans to launch its new Smart Sites module, creating a fully integrated K-12 community and website platform. Gabbart Communications was founded in 2003 and claims serving more than 600 school districts and having a 96% retention rate.

prweb.com

95 Percent Group Acquires Hill Reading Achievement Program “HillRAP”

The Hill Reading Achievement Program (HillRAP) from Hill Learning Center, a non-profit serving students with learning differences, has been acquired by 95 Percent Group. HillRAP is a technology-based, structured literacy intervention solution for students struggling to learn to read. The program is expected to complement 95 Percent Group’s comprehensive literacy curriculum and related professional development training for teachers. This marks 95 Percent Group’s first acquisition.

prnewswire.com

Saint Joseph’s University to Acquire Pennsylvania College of Health Sciences

The Philadelphia-based Jesuit institution, Saint Joseph’s University, is set to acquire Pennsylvania College of Health Sciences (PA College). This will be the University’s second acquisition in two years after acquiring the nearby University of the Sciences in June. The acquisition of PA College is expected to add a long-awaited nursing program to the University. In addition to the University’s student body of nearly 8,900 students, the acquisition is expected to add another 2,000 students after the deal closes. The acquisition is still subject to regulatory approval, but it is expected to close in January 2024.

highereddive.com

Dreamscape Learn Raises $20 Million

Dreamscape Learn closed a $20 Million Series A round that included backing by Bold Capital Partners, GSV Ventures, Verizon Ventures, and Cengage Group. The Company, built in collaboration with Arizona State University, has developed both VR-enabled biology courseware and a platform for instructor-led experiences that allow for classes to be taught from any imaginable location.

prnewswire.com

Forj Receives $15 Million of Funding and Announces Merger with Web Courseworks

Forj, a member experience platform designed for associations and professional communities, completed its Series A funding round and its merger with Web Courseworks. The transaction was led by Plymouth Growth, with participation from existing investors, Baird Capital and GCI. The funding and planned integration of Web Courseworks Learning Management System is expected to accelerate Forj’s desire to integrate community-driven learning into its platform.

prnewswire.com

Swiss EdTech Platform evulpo Raises $8.3 Million

Swiss edtech startup evulpo has raised $8.3 million in a seed round co-led by Serpentine Ventures and angel investor Dario Fazlic. The Company offers an online tutoring solution for students with instructional videos, summaries, and practice units for curriculum-related topics. The platform is currently available in seven European markets with the funds slated to drive expansion into South America and Africa.

tech.eu

CHERRY TREE EDUCATION FOR-PROFIT 50 INDEX

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

MONTHLY COMMENTARY

We recently returned from a national education technology conference, FETC in New Orleans, and wanted to share our findings in concert with what we’re seeing in the market. It is always a great opportunity to meet with current, former, and future clients, and an excellent opportunity to see and hear what is happening in real time with vendor and educator conversations.

There was a high degree of representation in certain segments, most notably in STEM and with devices, and to some degree in tutoring and with instructional resources. While attendance seemed to be down somewhat, there were also a healthy number of new companies present in a variety of segments, demonstrating that entrepreneurs continue to innovate in existing markets and to find new niches that schools find valuable. More broadly in education, it is too early to say what the selling season will be like, but we have many clients that continue to grow and profit, and have heard that the hiring / talent environment is much more positive for employers than it was in past years.

In the M&A world, things are very busy for Cherry Tree, with both recent closes, projects in process, and upcoming engagements. Activity is down overall in the market, with the impact most noticeable in larger transactions that involve debt financing, and with venture capital financings. We expect this to be a moderately active year for the M&A market as a whole, with more add-on acquisitions than platform investments, yet with plenty of owners desiring to sell and plenty of buyers with cash to buy.

Speaking of conferences, we are excited to see that the incredibly plugged-in thought leaders at Tech & Learning are putting on an edtech conference in September that we highly recommend (and we are proud to be sponsoring!) Be sure to mark off Sept 13-15 in Chicago, Illinois, and plan to be the EdExec Summit (https://www.techlearningevents.com/edexecsummit/home?ref=tlevents)!

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.

About Cherry Tree & Associates:

Cherry Tree is a Minneapolis-based investment banking firm with more than four decades of transaction experience, with education being a primary segment focus. Our services include Sell-Side M&A where ownership wants to either realize their liquidity goals or desires to recapitalize their business to better position it for future growth. Additionally, we represent Buy-Side clients in efforts to add acquisitions to complement their organic growth efforts.

Prepared by:

Chad Johnson, Managing Partner

cjohnson@cherrytree.com | 952.253.6010

www.cherrytree.com

Follow me on Twitter@ChadEricJohnson

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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.