The Education Investor: Second Quarter 2003

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

Private investment in education businesses surged 39 percent to reach $55.7 million in the second quarter of 2003, maintaining an upward trend for investment totals, which grew for the third consecutive quarter. The pre-K-12 sector accounted for 47 percent of investment dollars, while the corporate and professional sector's five investments represented 45 percent of investment transactions. The number of firms announcing financing rounds nearly doubled, from six in the first quarter to 11 in the second.

Merger and acquisition activity also remained high, with 29 announced transactions representing a 16 percent increase over the 25 transactions announced in the first quarter. Once again, the consolidating for-profit postsecondary institution market accounted for the greatest percentage of industry M&A activity, with 48 percent of education industry transactions and $346 million in announced deal values. Distribution of M&A deals across industry sectors has remained consistent over the first half of 2003.

This quarterly installment of The Education Investor offers a snapshot of second quarter private investment and M&A activity within the education industry.