The Education Investor: Third Quarter 2004

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

Private investment in the education industry grew 13% in the third quarter to $60.2 million. In keeping with second quarter activity, nine companies again announced financing rounds, while the average transaction value for announced deals increased 46% to 8.6 million. The postsecondary sector accounted for 62% of investment dollars, mainly due to Jenzabar's $35 million financing round.

On the M&A front, 23 acquisitions of education businesses were announced in the third quarter, up 35% from last quarter. Nine transactions took place in the K-12 sector, with the acquisition of Grow Network by McGraw-Hill Education the quarter's highest-profile deal. The postsecondary sector saw six announced transactions during this quarter, three of which were made by Laureate Education. Finally, the corporate and government sector was consistent with last quarter, with only four announced deals.