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EDUCATION TECHNOLOGY & SERVICES SECTOR REVIEW | 1Q 2020

Technology, Media & Telecom

Education Technology and Services Sector Review | 1Q 2020

HW Education Technology and Services Introduction

Brian TitteringtonDirector

[email protected](415)217-3425

Mike WilkinsCo-Head TMT Group

[email protected](415) 217-3411

GLOBAL HW EDUCATION TECHNOLOGY AND SERVICES TEAM

SELECT HW EXPERIENCE

has merged withhas been

acquired byhas been

acquired byhas been

acquired byhas been

acquired byhas been

acquired byhas been

acquired by

has received a majority

investment from

has received an investment from

1

Thierry MonjauzeCo-Head TMT Group

[email protected]+44 20 7518 8901

Derek LewisManaging Director


Andy LeedDirector


Anthony BenjaminDirector


HW TECHNOLOGY, MEDIA & TELECOM (“TMT”) GROUPHARRIS WILLIAMS (“HW”)

• 25+ years and more than 1,000 closed transactions

• 360+ professionals across eight office globally

• 170+ closed transactions in the last 24 months

• 10 industry groups

• 35+ dedicated TMT professionals

• TMT offices include Boston, San Francisco, and London

FOCUSED ADVISORY SERVICES

• Mergers and acquisitions (M&A)

• Capital raises

• Corporate divestitures

VERTICAL FOCUS SECTORS

• Architecture, Engineering, and Construction Software

• Education Technology and Services

• Energy Technology

• Facilities and Real Estate Software

• Financial Technology and Payments

• Government Technology

• Healthcare IT

• Industrial and Supply Chain Technology

• Internet and eCommerce

• Retail Technology

HORIZONTAL FOCUS SECTORS

• Application Software

• Cloud Managed Services and Hosting Solutions

• Compliance Solutions

• CRM and Marketing Automation

• Human Capital Management

• Infrastructure and Security Software

• IT and Tech-Enabled Services

• Marketing, Research, and Insights Software

KEY TMT THEMES

SaaS/Cloud Data & Analytics Digital Transformation A.I./Machine Learning

CONSISTENT RECOGNITION FOR QUALITY

mailto:[email protected]






HW Current Market Observations and Insights

LATEST HW MARKET INSIGHTS

For access to HW’s latest insight and perspective, email us at [email protected] or visit www.harriswilliams.com/news-insights

CURRENT MARKET OBSERVATIONS

2

For access to HW’s TMT content, email us at [email protected]

Deep Sector Expertise Across Key TMT Focus Areas

• Architecture, Engineering, and Construction

• eCommerce

• Financial Technology and Payments

• Healthcare IT

• Industrial and Supply Chain Technology

• and more

Buyer Sentiment

• The desire to invest remains – buyers are actively seeking to deploy capital

• Private equity firms and strategic acquirers have focused on meeting near-term operational needs and assessing the medium- to long-term impact of COVID-19

• Despite economic uncertainty, financial sponsors have record levels of capital to deploy, and many are communicating that they are “open for business” while acknowledging high-quality deal flow will be limited

• As capital markets stabilize, companies with strong liquidity positions will be well-positioned to pursue acquisitions that accelerate growth

Economic Outlook

• Volatility in the public markets will likely remain as investors, businesses, and policy-makers evaluate rapidly evolving COVID-19 developments

• Economists and industry analysts expect a meaningful decline in GDP in 2Q‘20 and 3Q‘20, while they debate the shape and timing of the recovery

Debt Markets

• In contrast to the first half of 1Q’20, debt markets have shifted to a risk-off mentality

• Concerns over liquidity and funding availability contribute to uncertainty regarding the duration of the COVID-19 risk mitigation focus

M&A Valuations

• COVID-19 has pushed timelines for many transactions, but select deals are still closing successfully. Some may be temporarily on hold and others are preparing for market and carefully weighing timing

• Companies that prove their ability to weather the current circumstances will receive significant interest and garner premium valuations

M&A Learnings from Past Economic Disruptions

COVID-19 and M&A: Insights from Asia

Recent Publications

Global Consumer Businesses Consider Emergence from COVID-19


https://www.harriswilliams.com/news-insights


Education Technology and Services Focus Areas

Select Market Participants

Key Trends(1)

Higher Education

Solutions focused on serving the educational and administrative needs of higher

education institutions

STUDENT INFORMATION SYSTEMS

CRM AND ENROLLMENT MANAGEMENT

LEARNING MANAGEMENT SYSTEMS

COMPETENCY-BASED LEARNING

FUNDRAISING AND ALUMNI MANAGEMENT

LEARNING ANALYTICS AND ASSESSMENTS

Spending on Higher Education Technology in the United States is expected to increase to

$29.8B by 2022

Higher Education institutions are broadening usage of mobile technology and software that

enables data-driven decision-making

Retention and enrollment solutions are increasingly being sought out by universities as

a means to better attract and retain student populations


K-12 Education

Solutions focused on serving the educational and administrative needs of K-12 schools

and districts

STUDENT INFORMATION SYSTEMS

PERSONALIZED/ ADAPTIVE LEARNING

LEARNING MANAGEMENT SYSTEMS

LEARNING ANALYTICS AND ASSESSMENTS

OUTCOMES AND PERFORMANCE MANAGEMENT

TUTORING AND ADVANCEMENT

Key Trends(1)

K-12 Education Technology spending in the United States is expected to reach $21.1B

by 2022

Districts and schools are increasingly leveraging data in order to drive and substantiate educational outcomes in

accordance with federal/state mandates

Adoption of digital tools and assessments continues to accelerate as administrators are seeing pronounced impact on student

performance and educators’ workflow efficiency


Key Trends(2)

Professional Education/Training

Solutions focused on supporting the continuing education and regulatory and compliance

requirements of corporations

CONTINUING EDUCATIONTRAINING/ LICENSURE

SKILL DEVELOPMENT

HR AND TALENT MANAGEMENT

DISTANCE LEARNING

GOVERNANCE, RISK, AND COMPLIANCE

Professional Education/Training spend is expected to reach $113.8B across the globe

by 2022

Corporations are investing in professional development as a way to attract and retain

employees and optimize workforce productivity

Personalized learning continues to evolve with new methods of delivery, while

certifications remain a way for individuals to differentiate in a competitive marketplace

3

Case Study: Kalkomey

HW’s TMT Group advised Kalkomey, a portfolio company of Inverness Graham, on its sale to Cove Hill Partners.

Mike WilkinsManaging Director

[email protected]

EDUCATION TECHNOLOGYPROFESSIONAL EDUCATION/

CERTIFICATIONSGOVTECH

a portfolio company of

has been acquired by

Kalkomey is a leading provider of online recreational safety education reaching all 50 U.S. states, as well as Australia, Canada, Guam, Mexico, New Zealand, Puerto Rico, and the United Kingdom. The Company works hand-in-hand with governmental agencies to provide tailored online safety education courses and certifications for boating, scuba diving, hunting, snowmobiling, and off-roading.

Kalkomey's regulatory-approved safety education courses provide official safety certifications to nearly a million students annually. The Company's cloud-based government agency software offerings drive operational efficiencies of key workflows from licensing and registration, to certification and event management, to compliance and reporting.

Cove Hill is a long-term-oriented private equity firm focused on partnering with management teams to build market-leading technology and consumer companies. The firm manages a long-duration fund with over $1 billion of commitments from its investors and founders. Based in Boston, Cove Hill has an innovative structure that provides the flexibility to enable a patient, concentrated, and value-add approach in a small portfolio of long-term investments.

Andy LeedDirector

[email protected]

Ben de FiebreAssociate

[email protected]

4

Tyler DewingManaging Director

[email protected]

Brian TitteringtonDirector

[email protected]

HW DEAL CONTACTS

TRANSACTION OVERVIEW

RELEVANT SUB-SECTORS






Case Study: CPI

PROFESSIONAL EDUCATION AND CERTIFICATIONS

GOVERNANCE, RISK, AND COMPLIANCE

EDTECH

HW’s TMT Group advised CPI, a portfolio company of FFL Partners, on its sale to Wendel.

a portfolio company of

has been acquired by

CPI is a premier provider of behavioral management and crisis intervention training solutions and certifications. The Company has trained over 10 million individuals in research-based best practices for responding to anxious, hostile, and violent behaviors in the workplace with safe and effective methods.

CPI is a leading provider of crisis prevention training and professional certifications. The Company has dedicated 40+ years to providing unique and proprietary training content, methodologies, and solutions proven to reduce violence and create safe workplace environments.

Wendel is one of Europe’s leading listed investment firms. Wendel plays an active role as a controlling or lead shareholder in its portfolio companies. The firm implements long-term development strategies, which involve boosting growth and margins of companies so as to enhance their leading market positions.

Mike WilkinsManaging Director

[email protected]

Derek LewisManaging Director

[email protected]

Andy LeedDirector

[email protected]

HW DEAL CONTACTS

5

TRANSACTION OVERVIEW

RELEVANT SUB-SECTORS




Credentials Solutions’ merger with Parchment

K12’s acquisition of Galvanize

• Campus Management is a global provider of cloud-based student information systems (SIS), CRM and ERP solutions, and Edcentric is a provider of data-driven solutions around student and alumni engagement, retention, and compliance

• Campus Management offers solutions for more than 1,100 colleges and universities in over 30 countries, while Edcentric offers solutions to over 1,400 higher education institutions

• The combined company will be uniquely positioned to help higher education institutions increase operational efficiency, promote student success, and improve overall institutional effectiveness

Completed February 20, 2020

EV: NP

Rev: NP EV/EBITDA: NP

EV/Rev: NP

• Galvanize is a provider of software engineering and data science workforce training and offers full-time and part-time immersive online boot camps across the U.S.

• Galvanize operates eight campuses across the U.S. with over 8,000 graduates and alumni in over 2,250 companies

• Post-acquisition, K12 will be able to expand its career education offering beyond high school by developing talent and capabilities for learners of all ages and backgrounds

Completed January 27, 2020

EV: $165M


EV/Rev: NP

• Parchment is a provider of a digital credential service platform that allows learners, academic institutions, and employers to request, verify, and share credentials in simple and secure ways

• Parchment’s platform has helped millions of people exchange more than 30 million transcripts and credentials globally

• The merger will provide credential issuers and receivers with a scaled partner focused on modernizing the exchange of verifiable academic and professional credentials

Completed February 11, 2020

EV: NP


EV/Rev: NP

ProfessionalEducation

HigherEducation

HigherEducation

Cornerstone’s pending acquisition of Saba

• Saba is a provider of a cloud-based intelligent learning and skills development platform for organizations to develop, engage, and inspire employees

• With over 20 years of industry experience, Saba continues to support employee growth through learning, performance, and recruiting solutions, serving over 4,000 customers worldwide

• Cornerstone will have an expanded reach and ability to help a larger, diverse group of clients, as the combined company will have more than 75 million users and serve ~7,000 organizations of all sizes globally

Announced February 24, 2020

Rev: $243M EV/EBITDA: NM

EV/Rev: 5.7xEV: $1,395M

Veritas Capital’s acquisition of Campus Management and Edcentric

Notable 1Q’20 Education Technology and Services Transactions


6

The Riverside Company’s acquisition of Red Nucleus

• Red Nucleus is a provider of learning and performance enhancement solutions for professionals serving in the life sciences industry

• With more than 256 industry awards, Red Nucleus’ eLearning platform delivers the latest research-based adult learning methodologies to a client base of over 200 companies

• The Riverside Company’s acquisition of Red Nucleus will help to transform the Company into a diversified tech-enabled training and compliance platform through strategic organic and investment initiatives

EV: $145M


EV/Rev: NP

Completed January 15, 2020


HW’s Perspective on the Impact of COVID-19

Short-Term Impact• Education providers are quickly developing and releasing COVID-19

continuing education courses and webinars, often free of charge• Several major in-person exams, such as the Bar or CFA exams, have

been cancelled and are scheduled to resume again later in 2020

Long-Term Impact• Consumers are expected to accelerate their adoption rates of distance

learning and online training

Impact

4

Impact

3

Short-Term Impact• Nearly 1,000 colleges across the U.S. are relaxing admissions requirements

for students who enroll in Fall 2020 and beyond, including suspending standardized test requirements

• Admissions directors estimate that nearly 30% to 45% of students may not show up for their first day of classes due to international visa issues

• Most universities have moved in-person classes to online platforms for the current quarter or semester

Long-Term Impact• Some university systems have committed to making their new

standardized test-optional admissions policies permanent• The Graduate Management Admission Council announced the

implementation of an online interim GMAT exam, with the potential for the exam to be made available indefinitely

Impact

4

Impact

2

Short-Term Impact• In a recent survey, 70% of parents reported that their children were

participating in an online distance learning program offered by their school, while 26% are being homeschooled with materials selected by the parents

Long-Term Impact• Over 40% of parents are concerned about negative impact on their

child’s education and nearly 30% believe the school year should be extended into the summer

Impact

4

Impact

3

2Moderate Impact

3Strong Impact

4Significant Impact

Many education systems will find that returning to “normal” will no longer be an option, which could be an important lever to catalyze system transformation, which is so badly needed

– The Brookings Institution

7

Higher Education

K-12 Education

Professional Education/Training

Close Da te Ta rge t Ac quire r EV ($ M)

Pending $1,395

Mar- 20 NP

Mar- 20 NP

Feb- 20 NP

Jan- 20 $165

Jan- 20 NP

Jan- 20 $145

Jan- 20 $129

Jan- 20 NP

Dec- 19 $910

Dec- 19 NP

Dec- 19 NP

Nov- 19 NP

Nov- 19 NP

Oct- 19 $100

Professional Education/Training Market Overview

RECENT SECTOR ACTIVITY(3)(4)EXPANSIVE, MULTI-VERTICAL MARKET

KEY MARKET DRIVERS

• Acceleration of distance learning resulting from COVID-19 pandemic

• Mandatory compliance and continuing education programs giving rise to attractive, repeat business models

• Availability of quality content continues to be a key pain point for highly regulated markets

• Companies are navigating increasingly complex regulatory environments with costly penalties for non-compliance

• Expansion of dynamic personalized learning methods such as gamification and micro-learning

xy3

PROFESSIONAL EDUCATION/TRAINING

GLOBAL PROFESSIONAL EDUCATION/TRAINING(2)

($ billions)

• The global Professional Education/Training market is expected to reach $113.8 billion by 2022, growing at a 10.0% CAGR

$85.5

$113.8

2019 2022P

8

Professional Education/Training Landscape

VERTICAL TRAINING SKILL DEVELOPMENT TECHNOLOGY SOLUTIONS

Healthcare

Wellness and Fitness

Emergency Response (Fire, EMT, Law Enforcement)

Financial Services and Insurance IT / Developer

Legal and Accounting

Education

Real Estate

Transportation

Specialty Training

eLearning Marketplaces

Sales and Marketing

Leadership Development

LMS / Talent Management

Content Development / Editing

MU

LTI-

VER

TIC

AL

PLA

TFO

RM

S

Product / Project Management

Life Sciences / Dental / Medical Device

Security Awareness

Language

Exam Delivery

9


Pending NP

Feb- 20 NP

Feb- 20 NP

Feb- 20 NP

Feb- 20 NP

Feb- 20 NP

Feb- 20 NP

Dec- 19 $850

Dec- 19 NP

Nov- 19 NP

Nov- 19 NP

Oct- 19 NP

Oct- 19 NP

Oct- 19 NP

Sep- 19 NP

$24.6

$29.8

2019 2022P

Software Hardware IT Services

KEY MARKET DRIVERS

• Growing acceptance that having a data-driven information management strategy is now a necessity for all institutions

• Continued shift to digital content, assessments, and learning modalities

• Rising demand for personalized learning tailored to an individual’s needs

• IT driving department savings through automated administrative workflows and streamlined recruitment/enrollment

• Accelerating adoption of distance and mobile learning

HIGHER EDUCATION

HIGHER EDUCATION TECHNOLOGY MARKET(1)

($ billions)

• The U.S. continues to spend significantly on Higher Education technology, with the market expected to reach $29.8 billion by 2022

5.8%

0.3%

3.6%

CAGR‘19-’22P

Higher Education Technology Market Overview

RECENT SECTOR ACTIVITY(3)(4)SPENDING LEVELS REMAIN STRONG

/

10

Higher Education Technology Landscape

PERSONALIZING LEARNING

IMPROVING OPERATIONS

DIV

ERSI

FIED

PLA

TFO

RM

S

Assessments / Adaptive Learning

Insights and Analytics

Procurement / Operations / Payments HR Recruiting / Compliance / Professional Development

Alumni Relations / Financial Aid

Enrollment Solutions / Career Readiness

Marketing / Web / Community

Online Skill Development / Tutoring

OPTIMIZING ADMINISTRATION

Educational Content Student Information Systems (SIS)Student Information Systems (SIS)

Learning Management Systems (LMS)

CRM / Retention Solutions

11

https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwih0YG5q8zMAhVRA44KHVM6CnkQjRwIBw&url=https://login.salesforce.com/&bvm=bv.121421273,d.c2E&psig=AFQjCNGvMa0vpKyx4Z34G4jnT1OMzUKV7Q&ust=1462860794051076


Pending NP

Pending NP

Mar- 20 $2,000

Mar- 20 NP

Mar- 20 NP

Mar- 20 NP

Feb- 20 NP

Feb- 20 NP

Jan- 20 NP

Jan- 20 $25

Dec- 19 NP

Nov- 19 NP

Nov- 19 NP

Oct- 19 NP

Oct- 19 NP

$17.5

$21.1

2019 2022P

Software Hardware IT Services

K-12 Education Technology Market Overview

RECENT SECTOR ACTIVITY(3)(4)EVOLVING MARKET WITH TECHNOLOGY DISRUPTION

KEY MARKET DRIVERS

• Increased emphasis on performance, reporting, and accountability underpinned by new legislation such as ESSA (Every Student Succeeds Act)

• Growing interest in data as a means to drive and substantiate student outcomes

• Greater usage of tools to drive engagement between parents, teachers, and administrators

• Consolidation of technology purchasing at the district level, with demand for solutions that address student, classroom, and administrator workflows

• Rising prominence of formative assessments coupled with data analytics that measure student mastery in order to support in-progress development

K-12

K-12 EDUCATION TECHNOLOGY MARKET(1)

($ billions)

• The U.S. continues to spend significantly on K-12 education technology, with the market expected to reach $21.1 billion by 2022P

9.4%

0.7%

6.1%

CAGR‘19-’22P

12

K-12 Education Technology Landscape

PERSONALIZING LEARNING

DIV

ERSI

FIED

PLA

TFO

RM

S

Learning Management Systems Data and Analytics

IMPROVING OPERATIONS

OPTIMIZING CONTENT

eLearning and Open Source Content

Item Banks / Curriculum ContentLearning Content

Classroom Management Tutor / Study Tools Special Education

Adaptive Learning Assessment Tools Gamified Learning

Student Information Systems

School Operations

HR / Professional Growth

Payments

Marketplaces

Marketing / Web / Community

13

Public Education Technology & Services Companies3

Key Public Companies Indexed Stock Performance

EDU

CA

TIO

N T

ECH

NO

LOG

Y P

LATF

OR

MS

Trading Metrics

EV/2020E EBITDA

EV/2020E Revenue

0.5x 8.7x2.1x

4.2x 27.8x11.2x


EDU

CA

TIO

NA

L C

ON

TEN

T A

ND

PU

BLI

SHIN

G

Trading Metrics

EV/2020E EBITDA

EV/2020E Revenue

0.5x 5.8x1.6x

4.0x 18.4x9.0x


PR

OFE

SSIO

NA

L ED

UC

ATI

ON

SER

VIC

ES

Trading Metrics

EV/2020E EBITDA

EV/2020E Revenue

0.4x 1.8x1.1x

6.0x 7.3x7.1x


FOR

PR

OFI

T ED

UC

ATI

ON

Trading Metrics

EV/2020E EBITDA

EV/2020E Revenue

0.6x 4.3x1.9x

6.0x 11.1x7.8x


INTE

RN

ATI

ON

AL

EDU

CA

TIO

N

Trading Metrics

EV/2020E EBITDA

EV/2020E Revenue

0.9x 11.5x5.3x

15.3x 21.1x18.2x

0.0%

50.0%

100.0%

150.0%

200.0%

Apr-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20

S&P 500Education Technology Platforms

0.0%

50.0%

100.0%

150.0%

200.0%


S&P 500Professional Education Services

0.0%

50.0%

100.0%

150.0%

200.0%


S&P 500For Profi t Education

14Note: As of March 31, 2020

129.6%

109.4%

109.4%

(44.7%)

109.4%

(92.9%)

109.4%

(75.5%)

109.4%

224.1%

0.0%

100.0%

200.0%

300.0%


S&P 500International Education

0.0%

50.0%

100.0%

150.0%

200.0%


S&P 500Educational Content and Publ ishing

Education Technology & Services – Trading Comparables3

PUBLIC COMPARABLES

As of March 31, 2020 ($ in millions)

EDUCATION TECHNOLOGY PLATFORMS

EDUCATIONAL CONTENT AND PUBLISHING

PROFESSIONAL EDUCATION SERVICES

INTERNATIONAL EDUCATION

Chegg, Inc. CHGG $4,513 $4,361 74.2% (5.2%) 323.9% 28.0% 27.0% 31.3% 11.0x 8.7x NM 27.8x NM

Pluralsight, Inc. PS 1,285 1,157 30.8% (65.1%) NM 36.6% 22.8% NM 4.1x 3.3x NM NM NM

2U, Inc. TWOU 1,500 1,350 28.6% (70.5%) (46.5%) 39.6% 27.2% NM 2.6x 2.1x NM NM NM

K12 Inc. LRN 577 740 50.4% (44.8%) (1.5%) 4.7% 6.2% 12.6% 0.6x 0.5x 10.0x 4.2x 23.6x

HealthStream, Inc. HSTM 636 775 80.4% (15.5%) (1.2%) 9.7% (1.1%) 17.2% 2.5x 2.5x 20.1x 14.7x 54.6x

Rosetta Stone Inc. RST 312 348 52.2% (33.9%) 43.8% 5.2% 5.2% 2.2% 1.7x 1.6x NM NM NM

Tribal Group plc TRB 128 143 74.3% (24.2%) (30.4%) 1.5% (17.1%) 18.9% 1.2x 1.5x NM 7.7x NM

Education Technology Platforms Median $636 $775 52.2% (33.9%) (1.3%) 9.7% 6.2% 17.2% 2.5x 2.1x 15.0x 11.2x 39.1x

FOR PROFIT EDUCATION

Adtalem Global Education Inc. ATGE $2,002 $1,418 51.7% (42.9%) (24.4%) 13.3% (4.9%) 24.9% 1.6x 1.8x 8.2x 7.3x 12.9x

Franklin Covey Co. FC 226 215 37.1% (41.0%) (23.1%) 6.4% 7.3% 12.6% 1.0x 0.9x 11.7x 7.3x NM

GP Strategies Corporation GPX 220 111 39.0% (46.1%) (74.3%) 13.2% 1.3% 6.3% 0.4x 0.4x 8.3x 6.0x 7.2x

Wilmington plc WIL 193 126 42.3% (47.8%) (53.9%) 5.9% (4.5%) 18.0% 1.2x 1.2x 6.3x 6.9x 11.0x

Professional Education Services Median $223 $171 40.7% (44.5%) (39.1%) 9.8% (1.6%) 15.3% 1.1x 1.1x 8.3x 7.1x 11.0x

15

Enterprise Market % of 52 1-Year Stock 3-Year Stock Revenue Growth 2020E EBITDA Enterprise Value / Price /

Company Ticker Value Capitalization Week High Performance Performance LTM 2020E Margin 'LTM Rev. '20E Rev. 'LTM EBITDA '20E EBITDA Earnings

RELX PLC REL $49,367 $41,517 82.1% 0.4% 10.1% 9.2% (4.4%) 35.9% 4.7x 4.9x 15.5x 13.7x 22.5x

Thomson Reuters Corporation TSX:TRI 35,672 33,485 87.2% 14.3% 42.3% 7.4% 4.0% 31.6% 6.0x 5.8x 32.6x 18.4x 23.7x

Wolters Kluwer N.V. WKL 21,189 18,753 90.4% 3.8% 69.3% 6.1% 3.0% 29.5% 4.1x 4.0x 14.5x 13.5x 26.1x

Pearson plc LSE:PSON 6,724 5,154 58.1% (38.2%) (19.5%) (2.6%) (9.0%) 16.7% 1.3x 1.4x 9.8x 8.6x 16.3x

John Wiley & Sons, Inc. JW.A 2,964 2,104 74.9% (15.3%) (30.3%) 3.5% 2.9% 19.7% 1.6x 1.6x 9.6x 7.9x 14.5x

Houghton Mifflin Harcourt Company HMHC 741 236 22.6% (75.2%) (81.5%) NM 0.6% 13.2% 0.5x 0.5x NM 4.0x 0.0x

Scholastic Corporation SCHL 714 874 55.7% (37.0%) (40.1%) NM (7.5%) 5.2% 0.4x 0.5x 9.4x 9.0x 0.0x

Educational Content and Publishing Median $6,724 $5,154 74.9% (15.3%) (19.5%) 6.1% 0.6% 19.7% 1.6x 1.6x 12.1x 9.0x 16.3x

Laureate Education, Inc. LAUR $4,126 $2,203 48.5% (29.7%) (26.3%) (1.2%) (2.9%) 21.4% 1.3x 1.3x 8.0x 6.1x 160.1x

Grand Canyon Education, Inc. LOPE 3,668 3,642 57.5% (33.7%) 6.5% (7.9%) 9.8% 38.7% 4.7x 4.3x 12.4x 11.1x 14.2x

Strategic Education, Inc. STRA 2,724 3,073 73.6% 5.8% 73.6% 57.2% 6.0% 27.0% 2.7x 2.6x 11.8x 9.6x 38.1x

American Public Education, Inc. APEI 168 357 68.4% (22.2%) 4.5% (3.8%) 3.0% 9.5% 0.6x 0.6x 4.5x 6.0x 38.6x

For Profit Education Median $3,196 $2,638 63.0% (25.9%) 5.5% (2.5%) 4.5% 24.2% 2.0x 1.9x 9.9x 7.8x 38.3x

TAL Education Group TAL $30,213 $31,516 89.1% 47.8% 199.9% 37.9% 32.8% 13.9% 9.4x 7.1x NM NM NM

New Oriental Education & Technology EDU 15,107 17,148 76.0% 21.6% 79.3% 26.0% 20.4% 17.1% 4.3x 3.6x 26.2x 21.1x 42.6x

GSX Techedu Inc. GSX 9,923 10,109 91.3% NM NM 425.8% 197.3% 0.0% 32.7x 11.5x NM NA NM

China Education Group Holdings Limited SEHK:839 2,887 2,815 79.6% (7.6%) NM 87.3% 29.4% 51.7% 10.6x 7.9x 22.1x 15.3x 33.8x

Meten International Education Group METX 1,300 1,242 98.5% NM NM 76.3% NM NA 6.4x NA NM NA NM

51 Talk COE 467 592 78.0% 400.0% 50.9% 27.5% 20.8% 0.0% 2.2x 1.8x NM NA NM

China Distance Education Holdings DL 217 226 55.8% (0.7%) (34.4%) 27.2% 12.4% 0.0% 1.0x 0.9x 5.1x NA 12.7x

International Education Median $2,887 $2,815 79.6% 21.6% 65.1% 37.9% 25.1% 6.9% 6.4x 5.3x 22.1x 18.2x 33.8x

Harris Williams Capabilities and Locations

HARRIS WILLIAMS OFFICE LOCATIONS

Harris Williams has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep-sector experience, integrated industry intelligence, and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website at www.harriswilliams.com/industries.

UNITED STATES EUROPE

Healthcare & Life Sciences Industrials

Energy, Power & Infrastructure

IndustrialsAerospace, Defense &

Government Services

Building Products & Materials

Business Services

Consumer Specialty Distribution

Technology, Media & Telecom

Transportation & Logistics

BostonOne International PlaceSuite 2620Boston, Massachusetts 02110Phone: +1 (617) 482-7501

Cleveland1900 East 9th Street20th FloorCleveland, Ohio 44114Phone: +1 (216) 689-2400

Minneapolis222 South 9th StreetSuite 3350Minneapolis, Minnesota 55402Phone: +1 (612) 359-2700

Richmond (Headquarters)1001 Haxall Point9th FloorRichmond, Virginia 23219Phone: +1 (804) 648-0072

San Francisco575 Market Street31st FloorSan Francisco, California 94105Phone: +1 (415) 288-4260

Washington, D.C. 800 17th St. NW2nd FloorWashington, D.C. 20006Phone: +1 (202) 207-2300

FrankfurtBockenheimer Landstrasse 33-3560325 FrankfurtGermanyPhone: +49 069 3650638 00

London25 Savile Row

4th FloorLondon W1S 2ER, EnglandPhone: +44 (0) 20 7518 8900

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Sources & Disclosures

1. Gartner.

2. Technavio.

3. Capital IQ.

4. PitchBook.

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SOURCES

DISCLOSURES

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 8th Floor, 20 Farringdon Street, London EC4A 4AB, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: [email protected]). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. DE321666994). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.

Technology, Media & Telecom · EDTECH HW’s TMT Group advised CPI, a portfolio company of FFL...

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Transcript of Technology, Media & Telecom · EDTECH HW’s TMT Group advised CPI, a portfolio company of FFL...