The Education Investor: 2004 Year-End Review and Outlook

New opportunities emerged in the education industry in 2004 as private investors added more than $260 million across all sectors. There were three IPOs in 2004, including AlphaSmart's and Educate's in the K-12 sector and Blackboard's in the postsecondary sector.

Private investment activity bounced back in 2004 with more than $50 million flowing into 13 pre-K-12 education suppliers, a 25% growth rate over 2003 levels. In the postsecondary sector, total private investment in 2004 came close to doubling 2003 levels, with all reported investments totaling approximately $161 million in 2004.

On the M&A front, 82 acquisitions of education businesses were announced in 2004. Of all of the transactions, Knowledge Learning Corporation's $1 billion acquisition of KinderCare was the largest, exceeding the next largest deal by a factor of almost ten.