![](https://www.axial.net/wp-content/uploads/2024/08/AdobeStock_728336475.jpeg)
Industry Insights: 2024 Summer Roundup
Our content team is always looking for ways to keep our readers informed about the latest industry trends through our…
M&A activity in the education sector continues to be busy. According to Berkery Noyes, volume in the education sector increased nine percent over 2017 and private equity-backed volume grew by 25 percent. Strategic acquirers are looking to pick up new assets while private equity firms look to grow their portfolios.
While the education sector is broad ranging, one trend that cuts across the industry is the  growing use of technology in educational products. This applies in all segments, including K-12 and workforce education.
“Education is a large market, but one of the trends that’s accelerating is the use of any technology that helps make learning more efficient. More schools and companies are trying to deliver education digitally and in a way that’s more targeted to the learner,” says Larry Shagrin, a partner with Millpond Equity Partners. “These programs are very analytical about what the learner is learning at what time and what pace. It’s a game changing way to deliver curriculum.”
At the end of 2018, Millpond Equity purchased TouchMath, a provider of supplemental, multi-sensory math curriculum and products. TouchMath, headquartered in Colorado Springs, Colorado, provides proprietary, standards-aligned curriculum and an interactive, multisensory math program for struggling learners. TouchMath’s products have primarily served the special education, learning disabled, autism spectrum, and remedial student populations and offers a method to teach the critical transition from concrete to symbolic mathematics learning.
Shagrin says Millpond invests across the education and training spectrum, but that they were interested in TouchMath not only for the technology component, but because it focuses on special and remedial education, which is a growing area. “Within the K-12 curriculum market, we still see a concentration of core providers such as McGraw Hill and Pearson, but there is considerable fragmentation and growth among supplemental providers,” he says. Millpond’s plan is to grow TouchMath organically by adding more curriculum, assessment and professional development products and via acquisition of other supplemental curriculum providers.
Millpond isn’t the only private equity firm that’s been busy in the education space. According to Capstone Headwaters’ first quarter education technology overview, in 2018 there were 126 announced or closed M&A transactions compared to 74 the year prior.
The rapid evolution of technology and growing availability of data-driven tools has escalated demand for a vast range of edtech solutions. Seeking to capitalize on this industry growth, private equity firms drove the majority of M&A transactions in 2018 with add-on acquisitions comprising 40 percent of total deal activity and platform acquisitions comprising 12 percent, according to Capstone Headwaters.
There have also been prominent strategic deals in the space, including Microsoft’s acquisition of BrightBytes’ DataSense, a technology used to assess outcomes in student achievement. Microsoft will integrate DataSense into its education platform Azure. Also in January 2019, Houghton Mifflin Harcourt acquired AI-driven adaptive learning solution Waggle while Centre Lane Partners’ acquired real-time learning assessment software Turning Technologies.
“There will continue to be opportunities throughout the education and training sector. The valuations are rich so we pick our spots, but I think you will continue to see growth,” says Shagrin.