The Education Investor: Year-End 2002

Authors: Outsell Client Services, Client Services; Eduventures, Inc.

The Education Investor: Year-End 2002 is a comprehensive, annual culmination of Eduventures' ongoing tracking and analysis of key trends and deals in the education industry's financial landscape. The report provides analysis of the investment and merger and acquisition activity across the education industry, with an emphasis on delivering insights on transaction trends, deal data and information, and market participants. The report provides both an in-depth review of activity and trends in 2002 and an outlook on the trends that will shape activity in 2003.

Education businesses, investors, acquirers, entrepreneurs, and other interested parties can use this publication to:

Understand the implications of consolidation and strategic investment on the overall education industry competitive landscape;
Compare current activity with historical trends;
Formulate strategies to account for forecasted activity;
Identify attractive areas for investment or acquisition; and
Identify potential investors or acquirers.

The report's key findings include:

Private investment in education declined 67 percent in 2002, and the $255 million in private investment in 2002 represents the lowest annual total since nine years ago, when investment totaled $93 million in 1994.

Though 2002's 72 announced deals represented a decline of nearly 37 percent from 2001's record 114 announced transactions, this still represented an historically high level of M&A activity.

Financial buyers and established education brand names made a significant mark on activity in 2002, as both groups were attracted by the growth opportunities presented by the education industry.

In 2003, Eduventures anticipates that M&A will continue to outpace investment activity, as acquisition remains a preferred means of accessing growth opportunities for strategic investors and buyers. Likewise, intense competition for high quality investment and acquisition opportunities will likely keep valuations high and overall transaction numbers low.