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MarketTracker™
TRAINING & EDUCATION SECTOR
Covering the six month period ending 30 November 2020
WWW.BOXINGTON.COM
– 1 –
• VALUATION TRACKER
“Training & Education sector valuations have bounced back, because of investor
expectations that the sector will be a key beneficiary of future government and
corporate spending in rebuilding and modernising a post-Covid world”
TIM EVANS
Managing Director
Boxington Corporate
Finance
WWW.BOXINGTON.COM
– 2 –
This document contains significant assumptions and has been prepared by Boxington Corporate Finance (Boxington) based on publicly available information, or additional information
supplied by the owners and/or managers of the companies described in this document, which has not been independently verified. Accuracy and completeness of the information provided
has been presumed and, therefore, its content may or may not be accurate and complete. No representation or warranty, either express or implied, is provided in relation to the accuracy,
completeness or reliability of the information or statements made in this document and Boxington, its affiliates, directors, officers, employees and representatives expressly disclaim any
and all liability with regards thereto. This document has been prepared for informational purposes only, is not a research report (as such term is defined by applicable law and regulations)
and is not to be relied on by any person for any purpose. In addition, it is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or
to participate in any particular trading strategy. No part of this material may be copied or duplicated in any form, or redistributed, without the prior written consent of Boxington.
• VALUATION TRACKER
IMPORTANT NOTICE
WWW.BOXINGTON.COM
LONDON
52 Brook Street
London
W1K 5DS United Kingdom
T +44 (0)207 355 6270
TOKYO
8th Floor, TOC Dai-ichi Building
1-8-3 Shibuya, Shibuya-ku
Tokyo 150-0002 Japan
T +81 (0)50 5534 9624
CHICAGO
150 S Wacker Drive
Chicago, IL 60606
United States
T +1 (312) 788 2620
TRAINING & EDUCATION SECTOR
MarketTracker™
BOXINGTON is a modern, full service corporate
finance advisory house, operating nationally and
internationally out of London (UK), and focused
exclusively on advising mid-market companies
across the Business to Business (B2B) Services
and Technologies space including the Training &
Education sector.
TIM EVANS
Managing Director
T +44 (0)207 355 6272
T +44 (0)7584 902 744
E twe@boxington.com
SATNAAM KAUR VIRDEE
Research Manager
T +44 (0)207 268 2265
T +44 (0)7547 531 226
E skv@boxington.com
REPORT AUTHORS
ALEX COOPER
Assistant Director
T +44 (0)207 268 2025
T +44 (0)7469 927 413
E ac@boxington.com
ABOUT US
REPORT SUMMARY
● Training & Education, a sector initially hard hit by
Coronavirus, is enjoying a valuation bounce-back, with
average share valuations increasing by c.35% in the period
and in some cases even surpassing pre-Covid valuations –
see page 4
● This bounce-back is underpinned by investor optimism in
the sector’s medium-term growth prospects, which are
expected to be driven by:
•
1) Extra government funding for the sector to curb
rapid unemployment whilst stimulating economic
demand; and
•
2) New demand from corporates to help reskill
workforces for a changed post-Covid world.
● EV/EBITDA multiples also recovered, with the average
quoted multiple moving meaningfully upwards by c.36% to
14.3x in the six months to 30th November – see page 5
● The market’s strong valuation performance has also been
helped by the ability of the Training & Education sector to
maintain margins by leveraging existing technologies to shift
rapidly towards remote learning.
● M&A deal activity returned during the six month period
driven by acquisitions made by strategic buyers wanting to
move into or increase their exposure to the Training &
Education sector, which is expected to take on a new
importance in a post-Covid world – see page 7
Boxington is authorised and regulated by the Financial Conduct Authority.
WWW.BOXINGTON.COM
– 4 –
FROM 1 JUNE 2020 TO 30 NOVEMBER 2020
Percentage change in share price (%)• VALUATION TRACKER
6 MONTH VALUATION MOVEMENTS
© 2020 Boxington Corporate Finance
UK
USA
EUROPE
APAC
+34.5%
24.3%
14.2%
53.0%
0.9%
16.0%
5.5%
50.8%
-12.4%
71.3%
71.6%
68.4%
52.4%
-36.4%
61.8%
114.6%
-2.7%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Average
movement
over the
period
Pearson posted resilient recent financial results with the
growth in its Global Online Learning division (including its
Virtual schools) boosting results. More broadly, its ongoing
investment in technology, its digital transformation programme
and the launch of a new digital marketplace (Pearson
Pathways) are being looked upon favourably by investors.
The ongoing shift away from print books (driven by
increasing virtual learning and a surge in free online
content) and Covid-strained library budgets have
materially impacted Wiley’s Research publishing segment
(52% of fiscal 2020 revenue) and led to investors
questioning its future growth prospects.
Lagardere’s share price has risen to pre-Covid
levels driven by market-defying education
publishing results (driven largely by the French
government’s support & funding for the education
sector) and speculation surrounding the possible
sale of Hachette (the largest publishing company
in France) to Vivendi.
Rise, a China HQ’d education services provider, has been
this report’s standout valuation gainer with its share price
doubling. This increase has been driven by its Q3 new
student enrolment increasing by 122% (due to market share
gain from small players hit more severely by Covid) and its
GP margin recovering to pre-pandemic level of 49% as its
learning centre utilisation rates continue to increase.
WWW.BOXINGTON.COM
– 5 –
14.3x
Average
multiple
36%
Average
movement
Change in EBITDAx over 6 monthsFROM 1 JUNE 2020 TO 30 NOVEMBER 2020
6 MONTH EBITDA MULTIPLE MOVEMENTS
* Discounts to public company multiples are typically needed when applied to private
companies to reflect risk and liquidity differentials.
© 2020 Boxington Corporate Finance
Current EBITDA multiple (decreased)
Prior 6 months EBITDA multiple
Key
Current EBITDA multiple (increased)
UK
USA
EUROPE
APAC
16.3x
21.8x
7.4x
6.6x
50.5x
15.0x
6.9x
9.3x
6.5x
5.7x
15.0x
8.9x
6.5x
12.6x
4.3x
2.4x
18.3x
24.0x
11.4x
6.9x
39.9x
20.0x
12.2x
8.7x
3.7x
10.7x
25.4x
5.0x
5.8x
15.9x
17.0x
3.7x
-5.0x
5.0x
15.0x
25.0x
35.0x
45.0x
55.0x
Although SaaS-based Cornerstone’s
share price increased by 16%, its
multiple decreased by c.20%. This is
as its earnings growth outstripped
its share price growth mainly due
to improving client renewal rates
and the successful integration of
Saba into the group.
GP Strategies’ multiple increased significantly by c.81%,
on the expectation that it will benefit from new
corporate demand for its training & reskilling
programs, the on-going transitioning of its programs
to virtual modalities, and the rescheduling of face-to-
face training activities.
Despite Sanoma’s share price increasing by
c.52%, its multiple decreased by c.43% because its
earnings performance has risen at a faster
rate than its share price. This has been driven
by a combination of Sanoma’s large ($500m)
acquisition of Santillana in October and strong
revenue growth in its Learning division.
WWW.BOXINGTON.COM
M&A ANALYSIS
UNDERSTANDING WHY SECTOR BUYERS HAVE MADE ACQUISITIONS
WWW.BOXINGTON.COM
– 7 –
UNDERSTANDING WHY SECTOR BUYERS HAVE MADE ACQUISITIONS
• VALUATION TRACKER
M&A ANALYSIS
© 2020 Boxington Corporate Finance
INCREASING RANGE
OF SERVICES
INCREASING
GEOGRAPHIC COVERAGE
INCREASING MARKET
SHARE & SYNERGIES
DIFFERENTIATING
EXISTING SERVICES
Amadeus, a German-based
staffing provider, acquired GFN, a
training provider focused on
publicly funded adult education in
IT. The deal highlights the on-
going trend of recruitment firms
transitioning into broader providers
of HR & training services through
acquisition.
IXL, the global provider of digital
K-12 instructional and assessment
tools, acquired 3P Learning, an
Australia-based provider of
education technology for $135m.
The sizeable addition of 3P
Learning, broadens IXL’s product
portfolio and international footprint
in the high growth educational
technology space.
Pluralsight, a US-based provider of
online technology training, acquired
DevelopIntelligence of the US, a
provider of strategic skills consulting
and virtual instructor-led training.
The deal enables Pluralsight to
deliver an all-in-one remote training
solution to clients, helping them
upskill a changing and increasingly
distributed post-Covid workforce.
SCALE
SERVICES
DEFENSIVE
STRATEGIC
Buyers
UK-based training and education
provider, Learning Curve, acquired
Acorn, a provider of professional
training to young people. The deal
solidifies Learning Curve’s position
as one of the UK’s largest
training providers and underlines
their aim to tackle youth
unemployment (which has risen
sharply due to Covid).
WWW.BOXINGTON.COM
APPENDIX
BASE DATA
WWW.BOXINGTON.COM
– 9 –
TRAINING & EDUCATION SECTOR
• VALUATION TRACKER
BASE DATA
UK
USA
EUROPE
APAC
USD$
Enterprise Value (EV)
1,459.16
1,277.11
8,194.79
255.54
4,002.14
318.85
253.30
2,855.97
2,128.76
8,746.48
748.47
2,705.70
56.91
2,972.71
417.94
69.17
Comparable EV (-6
months)
1,301.01
1,307.55
6,354.97
257.16
2,378.23
312.62
229.14
3,112.95
1,780.33
7,635.21
440.93
2,736.48
141.11
1,867.20
201.44
78.92
Market Capitalisation
1,539.49
1,503.83
6,695.92
229.25
2,863.85
322.44
204.23
1,974.13
1,038.78
3,158.01
821.91
2,417.25
130.03
3,170.72
376.04
140.09
Net Debt
-48.08
-87.94
1,667.79
27.39
1,149.92
10.71
55.94
922.61
1,085.02
5,527.97
-73.49
282.30
-69.99
-202.82
54.85
-70.02
Last 12 Months (LTM)Revenue
372.80
176.66
4,742.85
278.69
683.59
198.46
505.42
1,839.28
1,460.90
7,289.05
155.68
1,266.39
174.56
1,067.85
153.72
113.48
EBITDA
79.52
53.16
719.75
37.10
100.36
15.92
20.80
327.96
577.30
819.07
29.47
536.52
9.88
187.30
25.34
18.55
EBIT
70.84
21.41
429.70
28.97
26.71
4.65
1.86
208.83
258.16
-192.26
26.87
341.73
2.87
153.61
-19.04
17.13
EBITDAx
18.3x
24.0x
11.4x
6.9x
39.9x
20.0x
12.2x
8.7x
3.7x
10.7x
25.4x
5.0x
5.8x
15.9x
16.5x
3.7x
EBITx
20.6x
59.7x
19.1x
8.8x
149.8x
50.5x
136.1x
13.7x
8.2x
(45.5x)
27.9x
7.9x
19.8x
19.4x
(22.0x)
4.0x
EBITDAx (-6 months)
16.3x
21.8x
7.4x
6.6x
59.5x
15.0x
6.9x
9.3x
6.5x
5.7x
15.0x
8.9x
6.5x
12.6x
4.3x
2.4x
EBITx (-6 months)
18.2x
48.3x
11.0x
7.3x
161.0x
39.1x
17.3x
13.9x
18.1x
20.5x
16.4x
23.0x
9.3x
16.9x
37.1x
17.3x
As at 30 November 2020
Source
London | Tokyo | Chicago
BOXINGTON CORPORATE FINANCE
WWW.BOXINGTON.COM
TRAINING & EDUCATION SECTOR
Covering the six month period ending 30 November 2020
WWW.BOXINGTON.COM
– 1 –
• VALUATION TRACKER
“Training & Education sector valuations have bounced back, because of investor
expectations that the sector will be a key beneficiary of future government and
corporate spending in rebuilding and modernising a post-Covid world”
TIM EVANS
Managing Director
Boxington Corporate
Finance
WWW.BOXINGTON.COM
– 2 –
This document contains significant assumptions and has been prepared by Boxington Corporate Finance (Boxington) based on publicly available information, or additional information
supplied by the owners and/or managers of the companies described in this document, which has not been independently verified. Accuracy and completeness of the information provided
has been presumed and, therefore, its content may or may not be accurate and complete. No representation or warranty, either express or implied, is provided in relation to the accuracy,
completeness or reliability of the information or statements made in this document and Boxington, its affiliates, directors, officers, employees and representatives expressly disclaim any
and all liability with regards thereto. This document has been prepared for informational purposes only, is not a research report (as such term is defined by applicable law and regulations)
and is not to be relied on by any person for any purpose. In addition, it is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or
to participate in any particular trading strategy. No part of this material may be copied or duplicated in any form, or redistributed, without the prior written consent of Boxington.
• VALUATION TRACKER
IMPORTANT NOTICE
WWW.BOXINGTON.COM
LONDON
52 Brook Street
London
W1K 5DS United Kingdom
T +44 (0)207 355 6270
TOKYO
8th Floor, TOC Dai-ichi Building
1-8-3 Shibuya, Shibuya-ku
Tokyo 150-0002 Japan
T +81 (0)50 5534 9624
CHICAGO
150 S Wacker Drive
Chicago, IL 60606
United States
T +1 (312) 788 2620
TRAINING & EDUCATION SECTOR
MarketTracker™
BOXINGTON is a modern, full service corporate
finance advisory house, operating nationally and
internationally out of London (UK), and focused
exclusively on advising mid-market companies
across the Business to Business (B2B) Services
and Technologies space including the Training &
Education sector.
TIM EVANS
Managing Director
T +44 (0)207 355 6272
T +44 (0)7584 902 744
E twe@boxington.com
SATNAAM KAUR VIRDEE
Research Manager
T +44 (0)207 268 2265
T +44 (0)7547 531 226
E skv@boxington.com
REPORT AUTHORS
ALEX COOPER
Assistant Director
T +44 (0)207 268 2025
T +44 (0)7469 927 413
E ac@boxington.com
ABOUT US
REPORT SUMMARY
● Training & Education, a sector initially hard hit by
Coronavirus, is enjoying a valuation bounce-back, with
average share valuations increasing by c.35% in the period
and in some cases even surpassing pre-Covid valuations –
see page 4
● This bounce-back is underpinned by investor optimism in
the sector’s medium-term growth prospects, which are
expected to be driven by:
•
1) Extra government funding for the sector to curb
rapid unemployment whilst stimulating economic
demand; and
•
2) New demand from corporates to help reskill
workforces for a changed post-Covid world.
● EV/EBITDA multiples also recovered, with the average
quoted multiple moving meaningfully upwards by c.36% to
14.3x in the six months to 30th November – see page 5
● The market’s strong valuation performance has also been
helped by the ability of the Training & Education sector to
maintain margins by leveraging existing technologies to shift
rapidly towards remote learning.
● M&A deal activity returned during the six month period
driven by acquisitions made by strategic buyers wanting to
move into or increase their exposure to the Training &
Education sector, which is expected to take on a new
importance in a post-Covid world – see page 7
Boxington is authorised and regulated by the Financial Conduct Authority.
WWW.BOXINGTON.COM
– 4 –
FROM 1 JUNE 2020 TO 30 NOVEMBER 2020
Percentage change in share price (%)• VALUATION TRACKER
6 MONTH VALUATION MOVEMENTS
© 2020 Boxington Corporate Finance
UK
USA
EUROPE
APAC
+34.5%
24.3%
14.2%
53.0%
0.9%
16.0%
5.5%
50.8%
-12.4%
71.3%
71.6%
68.4%
52.4%
-36.4%
61.8%
114.6%
-2.7%
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
Average
movement
over the
period
Pearson posted resilient recent financial results with the
growth in its Global Online Learning division (including its
Virtual schools) boosting results. More broadly, its ongoing
investment in technology, its digital transformation programme
and the launch of a new digital marketplace (Pearson
Pathways) are being looked upon favourably by investors.
The ongoing shift away from print books (driven by
increasing virtual learning and a surge in free online
content) and Covid-strained library budgets have
materially impacted Wiley’s Research publishing segment
(52% of fiscal 2020 revenue) and led to investors
questioning its future growth prospects.
Lagardere’s share price has risen to pre-Covid
levels driven by market-defying education
publishing results (driven largely by the French
government’s support & funding for the education
sector) and speculation surrounding the possible
sale of Hachette (the largest publishing company
in France) to Vivendi.
Rise, a China HQ’d education services provider, has been
this report’s standout valuation gainer with its share price
doubling. This increase has been driven by its Q3 new
student enrolment increasing by 122% (due to market share
gain from small players hit more severely by Covid) and its
GP margin recovering to pre-pandemic level of 49% as its
learning centre utilisation rates continue to increase.
WWW.BOXINGTON.COM
– 5 –
14.3x
Average
multiple
36%
Average
movement
Change in EBITDAx over 6 monthsFROM 1 JUNE 2020 TO 30 NOVEMBER 2020
6 MONTH EBITDA MULTIPLE MOVEMENTS
* Discounts to public company multiples are typically needed when applied to private
companies to reflect risk and liquidity differentials.
© 2020 Boxington Corporate Finance
Current EBITDA multiple (decreased)
Prior 6 months EBITDA multiple
Key
Current EBITDA multiple (increased)
UK
USA
EUROPE
APAC
16.3x
21.8x
7.4x
6.6x
50.5x
15.0x
6.9x
9.3x
6.5x
5.7x
15.0x
8.9x
6.5x
12.6x
4.3x
2.4x
18.3x
24.0x
11.4x
6.9x
39.9x
20.0x
12.2x
8.7x
3.7x
10.7x
25.4x
5.0x
5.8x
15.9x
17.0x
3.7x
-5.0x
5.0x
15.0x
25.0x
35.0x
45.0x
55.0x
Although SaaS-based Cornerstone’s
share price increased by 16%, its
multiple decreased by c.20%. This is
as its earnings growth outstripped
its share price growth mainly due
to improving client renewal rates
and the successful integration of
Saba into the group.
GP Strategies’ multiple increased significantly by c.81%,
on the expectation that it will benefit from new
corporate demand for its training & reskilling
programs, the on-going transitioning of its programs
to virtual modalities, and the rescheduling of face-to-
face training activities.
Despite Sanoma’s share price increasing by
c.52%, its multiple decreased by c.43% because its
earnings performance has risen at a faster
rate than its share price. This has been driven
by a combination of Sanoma’s large ($500m)
acquisition of Santillana in October and strong
revenue growth in its Learning division.
WWW.BOXINGTON.COM
M&A ANALYSIS
UNDERSTANDING WHY SECTOR BUYERS HAVE MADE ACQUISITIONS
WWW.BOXINGTON.COM
– 7 –
UNDERSTANDING WHY SECTOR BUYERS HAVE MADE ACQUISITIONS
• VALUATION TRACKER
M&A ANALYSIS
© 2020 Boxington Corporate Finance
INCREASING RANGE
OF SERVICES
INCREASING
GEOGRAPHIC COVERAGE
INCREASING MARKET
SHARE & SYNERGIES
DIFFERENTIATING
EXISTING SERVICES
Amadeus, a German-based
staffing provider, acquired GFN, a
training provider focused on
publicly funded adult education in
IT. The deal highlights the on-
going trend of recruitment firms
transitioning into broader providers
of HR & training services through
acquisition.
IXL, the global provider of digital
K-12 instructional and assessment
tools, acquired 3P Learning, an
Australia-based provider of
education technology for $135m.
The sizeable addition of 3P
Learning, broadens IXL’s product
portfolio and international footprint
in the high growth educational
technology space.
Pluralsight, a US-based provider of
online technology training, acquired
DevelopIntelligence of the US, a
provider of strategic skills consulting
and virtual instructor-led training.
The deal enables Pluralsight to
deliver an all-in-one remote training
solution to clients, helping them
upskill a changing and increasingly
distributed post-Covid workforce.
SCALE
SERVICES
DEFENSIVE
STRATEGIC
Buyers
UK-based training and education
provider, Learning Curve, acquired
Acorn, a provider of professional
training to young people. The deal
solidifies Learning Curve’s position
as one of the UK’s largest
training providers and underlines
their aim to tackle youth
unemployment (which has risen
sharply due to Covid).
WWW.BOXINGTON.COM
APPENDIX
BASE DATA
WWW.BOXINGTON.COM
– 9 –
TRAINING & EDUCATION SECTOR
• VALUATION TRACKER
BASE DATA
UK
USA
EUROPE
APAC
USD$
Enterprise Value (EV)
1,459.16
1,277.11
8,194.79
255.54
4,002.14
318.85
253.30
2,855.97
2,128.76
8,746.48
748.47
2,705.70
56.91
2,972.71
417.94
69.17
Comparable EV (-6
months)
1,301.01
1,307.55
6,354.97
257.16
2,378.23
312.62
229.14
3,112.95
1,780.33
7,635.21
440.93
2,736.48
141.11
1,867.20
201.44
78.92
Market Capitalisation
1,539.49
1,503.83
6,695.92
229.25
2,863.85
322.44
204.23
1,974.13
1,038.78
3,158.01
821.91
2,417.25
130.03
3,170.72
376.04
140.09
Net Debt
-48.08
-87.94
1,667.79
27.39
1,149.92
10.71
55.94
922.61
1,085.02
5,527.97
-73.49
282.30
-69.99
-202.82
54.85
-70.02
Last 12 Months (LTM)Revenue
372.80
176.66
4,742.85
278.69
683.59
198.46
505.42
1,839.28
1,460.90
7,289.05
155.68
1,266.39
174.56
1,067.85
153.72
113.48
EBITDA
79.52
53.16
719.75
37.10
100.36
15.92
20.80
327.96
577.30
819.07
29.47
536.52
9.88
187.30
25.34
18.55
EBIT
70.84
21.41
429.70
28.97
26.71
4.65
1.86
208.83
258.16
-192.26
26.87
341.73
2.87
153.61
-19.04
17.13
EBITDAx
18.3x
24.0x
11.4x
6.9x
39.9x
20.0x
12.2x
8.7x
3.7x
10.7x
25.4x
5.0x
5.8x
15.9x
16.5x
3.7x
EBITx
20.6x
59.7x
19.1x
8.8x
149.8x
50.5x
136.1x
13.7x
8.2x
(45.5x)
27.9x
7.9x
19.8x
19.4x
(22.0x)
4.0x
EBITDAx (-6 months)
16.3x
21.8x
7.4x
6.6x
59.5x
15.0x
6.9x
9.3x
6.5x
5.7x
15.0x
8.9x
6.5x
12.6x
4.3x
2.4x
EBITx (-6 months)
18.2x
48.3x
11.0x
7.3x
161.0x
39.1x
17.3x
13.9x
18.1x
20.5x
16.4x
23.0x
9.3x
16.9x
37.1x
17.3x
As at 30 November 2020
Source
London | Tokyo | Chicago
BOXINGTON CORPORATE FINANCE
WWW.BOXINGTON.COM