INVESTMENT BANKING Q1 2020 EDUCATION

INVESTMENT BANKING

EDUCATION TECHNOLOGY INSIGHT

Early Childhood // K-12 // Higher Education // Corporate // B2C

Q1 2022

IN THIS ISSUE

Market Update

2

About Us

13

FOR INSTITUTIONAL USE ONLY

EDUCATION TECHNOLOGY INSIGHT

Q1 2022

Education Technology M&A & Capital Raising Activity

Number of U.S. Deals by Quarter(1)

Dollar Volume of U.S. Deals by Quarter(1)(2)

450

411

400

387

379

357

350

300

250

200 174

150

100

154

50

10

0

10

Q2 '20

195

153

16 26 Q3 '20

269

201

32 36 Q4 '20

290

207

39 44 Q1 '21

261

46 50 Q2 '21

310

46 55 Q3 '21

289

45 53 Q4 '21

287

38 54 Q1 '22

Strategic PE - Majority / Sale PE - Minority

379 transactions were announced in Q1 2022, approximately 75% of which were minority PE deals

$20,000 $18,000

($ in millions)

$16,000

$19,480 $5,430

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000 $0

$1,207 $713 $356 Q2 '20

$12,420

$13,000

$4,810

$4,960 $11,080

$3,925

$2,680 $892 $353 Q3 '20

$5,220

$2,390 Q4 '20

$4,691

$3,030 $491 $1,170 Q1 '21

$2,970 Q2 '21

$5,150

$2,880 Q3 '21

$5,510

$3,150 $450 $1,910 Q4 '21

$4,303

$3,420 $92 $792

Q1 '22

Strategic PE - Majority / Sale PE - Minority

Over $4.3 billion in Q1 2022 in announced transaction value, approximately 80% of which came from PE deals

1. Source: PitchBook for the period January 1st 2022 to March 31st 2022. 2. Comprised of deals where the $ amount of investment was disclosed

RAYMOND JAMES INVESTMENT BANKING 2

EDUCATION TECHNOLOGY INSIGHT

Education Technology M&A & Capital Raising Activity

Q1 2022 U.S. Deals by Sector

Early Childhood 3%

Q1 2022 U.S. Deals by Domain

Web Filtering /

B2C

Security

3%

Communications & 3%

Social

5%

B2C 18%

K-12 36%

Higher Ed 18%

Corporate 26%

Admissions & Enrollment

8%

Data Analytics, Assessments & Student Success

13%

Administrative / School Operations 15%

Online Learning 28%

Corporate Learning, Certification & Recruiting 26%

Q1 2022

Companies focused on the K-12 and Corporate markets comprised 60%+ of the transactions announced in Q1

2022

The industry witnessed a focus on Online Learning and Corporate Learning, Certification & Recruiting

domains in Q1 2022, which comprised ~55% of total transactions

Source: Mergermarket; Selected Recent Strategic M&A Activity and Selected Recent Private Equity Activity from the period January 1st to March 31st 2022.

RAYMOND JAMES INVESTMENT BANKING 3

EDUCATION TECHNOLOGY INSIGHT

Q1 2022

Market Valuation Metrics

Education Technology TEV / Revenue(1)(3)

12.0x 8.0x

10.8x 8.5x

10.7x 9.7x

10.5x 7.8x

4.0x

9.6x 8.0x

6.9x 6.2x

6.5x 6.1x

6.2x 5.3x

6.0x 5.4x

6.0x 5.2x

5.3x 4.2x

4.6x 4.0x

4.3x 3.9x

3.7x 3.5x

2.6x 2.2x

2.4x 2.3x

1.6x 1.4x

0.0x

Duolingo

Tyler

Docebo

Technologies

Workday Instructure

Oracle

Constellation PowerSchool Software

Chegg

2022 2023

Coursera ReadyTech Sylogist Blackbaud

D2L

Learning

2U

Technologies

Group

Education Technology TEV / EBITDA(2)(3)

30.0x 20.0x 10.0x

22.2x 14.2x

21.2x 18.2x

20.5x 17.9x

0.0x

2U

Constellation Software PowerSchool

19.3x 17.0x

Instructure

19.0x 15.8x

15.4x 13.8x

Chegg

Blackbaud

2022 2023

13.0x 12.3x Oracle

13.5x 11.3x

Sylogist

12.6x 10.8x

12.0x 10.8x

ReadyTech

Learning Technologies Group

Source: CapIQ and Equity Research as of March 31, 2022. 1. Revenue multiples 20.0x are considered Not Meaningful (NM) 2. EBITDA multiples 35.0x are considered Not Meaningful (NM) 3. Omits companies where multiples for both FY2021 and FY2022 are either not available or not meaningful

RAYMOND JAMES INVESTMENT BANKING 4

EDUCATION TECHNOLOGY INSIGHT

Market Valuation Metrics

Education Services TEV / Revenue(1)(3)

4.5x

3.0x

2.2x

2.2x

1.5x

1.9x

1.8x

0.0x Tribal Group plc

John Wiley & Sons, Inc.

Education Services TEV / EBITDA(2)(3)

16.0x

11.3x

11.1x

9.8x

8.0x

1.7x

1.7x

Pearson plc 2022 2023

9.2x

8.8x

1.1x

1.0x

Stride, Inc.

8.4x

Q1 2022

0.7x

0.8x

Aspen Group, Inc.

6.2x

5.6x

0.0x Tribal Group plc

Pearson plc

2022 2023

Source: CapIQ and Equity Research as of March 31, 2022. 1. Revenue multiples 20.0x are considered Not Meaningful (NM) 2. EBITDA multiples 35.0x are considered Not Meaningful (NM) 3. Omits companies where multiples for both FY2021 and FY2022 are either not available or not meaningful

John Wiley & Sons, Inc.

Stride, Inc. RAYMOND JAMES INVESTMENT BANKING 5

EDUCATION TECHNOLOGY INSIGHT

Q1 2022

Public Comparables

Education Technology

Company

Oracle Workday Constellation Software Tyler Technologies Chegg Blackbaud PowerSchool Duolingo Instructure Coursera 2U Learning Technologies Group Docebo D2L ReadyTech Sylogist*

Stock Price 03/31/2022

Market Cap

Enterprise Value(1)

$82.73 $225,294 $280,803

239.46

60,910

59,362

1,711.71

36,274

37,319

444.89

18,819

19,846

36.28

4,903

5,055

59.87

3,040

4,003

16.51

2,616

3,759

95.11

4,190

3,669

20.06

2,823

3,182

23.04

3,639

2,837

13.28

1,014

1,729

2.14

1,727

1,707

51.76

1,767

1,556

10.38

578

465

2.44

261

282

7.56

181

187

Mean

Education Technology Median

Revenue(2)

TEV EBITDA(3)

2022E

6.5x 9.6x 6.2x 10.7x 6.0x 3.7x 6.0x 10.8x 6.9x 5.3x 1.6x 2.4x 10.5x 2.6x 4.6x 4.3x 6.1x 6.0x

2023E

6.1x 8.0x 5.3x 9.7x 5.2x 3.5x 5.4x 8.5x 6.2x 4.2x 1.4x 2.3x 7.8x 2.2x 4.0x 3.9x 5.2x 5.3x

2022E

13.0x NM

21.2x NM

19.0x 15.4x 20.5x

NM 19.3x

NM 22.2x 12.0x

NM NM 12.6x 13.5x 16.9x 17.2x

2023E

12.3x 30.2x 18.2x

NM 15.8x 13.8x 17.9x

NM 17.0x

NM 14.2x 10.8x

NM NM 10.8x 11.3x 15.7x 14.2x

Revenue Growth(2)

21A / 22E 22E/ 23E

5%

7%

21%

20%

19%

17%

9%

10%

9%

14%

5%

6%

12%

11%

35%

27%

13%

11%

30%

25%

13%

13%

2%

5%

42%

35%

19%

20%

31%

16%

42%

11%

19%

16%

16%

14%

EBITDA Margin(3)

2022E

50% 24% 29% 26% 32% 24% 29% NM 36% NM 7% 20% NM NM 37% 32% 29% 29%

2023E

49% 26% 29% 26% 33% 25% 30% 5% 37% NM 10% 21% 5% NM 37% 34% 26% 28%

Education Services

Company Pearson John Wiley & Sons Stride Tribal Group Aspen Group

Stock Price 03/31/2022

Market Cap

Enterprise Value(1)

$9.87

$7,456

$8,121

53.03

2,956

3,927

36.33

1,508

1,785

1.15

247

243

1.62

41

58

Mean

Education Services Median

Overall Median

TEV

Revenue(2)

EBITDA(3)

2022E

1.7x 1.9x 1.1x 2.2x 0.7x 1.5x 1.8x

4.6x

2023E

1.7x 1.8x 1.0x 2.2x 0.8x 1.5x 1.7x

4.0x

2022E

9.8x 8.8x 6.4x 11.3x NM 9.1x 9.3x

2023E

9.2x 8.4x 5.8x 11.1x NM 8.6x 8.8x

13.3x

12.3x

Revenue Growth(2)

21A / 22E 22E / 23E

2%

3%

2%

5%

5%

5%

(1%)

2%

2%

(5%)

2%

2%

2%

3%

12%

11%

EBITDA Margin(3)

2022E

17% 21% 17% 20% NM 19% 19%

2023E

18% 21% 17% 20% NM 19% 19%

25%

26%

EBITDA excludes stock-based compensation Source: CapIQ and Equity Research * Revenue and EBITDA figures as of FY ending September 30 1. Sorted by Enterprise Value 2. Revenue multiples 20.0x and revenue growth rates ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download