Edtech Business

Berkery Noyes: Education Mergers and Acquisitions Value Nosedived 70 Percent in 2016

Jan 30, 2017

EDUCATION BARGAIN BIN? The value of education mergers and acquisitions in 2016 nosedived a walloping 70 percent—from $17.75 billion to $5.32 billion, according to investment bank Berkery Noyes. That number is even more startling given that the number of transactions dropped just 11 percent. What this means is that companies are getting snapped up for lower prices than in previous years—something that might delight buyers but certainly dismay investors.

The biggest deal was the $1.1 billion sale of Apollo Education Group, which accounted for nearly one-fifth of the industry’s total sale value. “Of note, there were seven deals in 2016 with disclosed values above $100 million,” says Berkery Noyes, “as opposed to 19 such deals in 2015.”

The days of foolhardy funding are over, many venture capitalists have told EdSurge. Many entrepreneurs are hard-pressed to show they can generate sustainable revenue—especially if they’re seeking more venture funding.

Diving into specific sectors, Berkery Noyes notes that deal volume in the K-12 Media and Tech segment increased by 19 percent over 2015, while the higher-ed counterpart declined by more than 50 percent. The report’s total numbers include transactions in childcare, corporate and professional training services.

Edtech Business

Berkery Noyes: Education Mergers and Acquisitions Value Nosedived 70 Percent in 2016

Jan 30, 2017

EDUCATION BARGAIN BIN? The value of education mergers and acquisitions in 2016 nosedived a walloping 70 percent—from $17.75 billion to $5.32 billion, according to investment bank Berkery Noyes. That number is even more startling given that the number of transactions dropped just 11 percent. What this means is that companies are getting snapped up for lower prices than in previous years—something that might delight buyers but certainly dismay investors.

The biggest deal was the $1.1 billion sale of Apollo Education Group, which accounted for nearly one-fifth of the industry’s total sale value. “Of note, there were seven deals in 2016 with disclosed values above $100 million,” says Berkery Noyes, “as opposed to 19 such deals in 2015.”

The days of foolhardy funding are over, many venture capitalists have told EdSurge. Many entrepreneurs are hard-pressed to show they can generate sustainable revenue—especially if they’re seeking more venture funding.

Diving into specific sectors, Berkery Noyes notes that deal volume in the K-12 Media and Tech segment increased by 19 percent over 2015, while the higher-ed counterpart declined by more than 50 percent. The report’s total numbers include transactions in childcare, corporate and professional training services.

STAY UP TO DATE ON EDTECH
News, research, and opportunities - sent weekly.
STAY UP TO DATE ON EDTECH
News, research, and opportunities - sent weekly.