Q4 2015 E DUCATION SECTOR OVERVIEW

April 8, 2016

PARCHMAN , V AUGHAN & C OMPANY, LLC

S Y M PH ON Y C E N T E R , SUI T E 1 2 0
1 0 4 0 PA RK AV E N UE , B A LT I M ORE , M D 2 1 2 0 1
410-244-8971 | www.parchmanvaughan.com

Table of Contents

Overview

Education Stock Price Performance by Sector

Education Public Company Valuation Data

Select U.S. Q4 2015 Education Merger, Acquisition, and Divestiture Transactions..

Overview

Parchman, Vaughan & Company, LLC (PVC) is pleased to share with you our quarterly summary of the
earnings and other multiples of publicly-traded education firms, as well as select merger, acquisition, and
divestiture announcements.
We caution that many factors affect the valuation of firms and these multiples are, at best, a guidepost for
how the equity markets view the industry, specifically publicly-traded participants. Growth rates, return on
capital invested, visibility of earnings, and a host of other elements influence valuation.

One Year Education Stock Price Performance by Sector

One Year Stock Price
130.0

120.0

Prices Indexed to 100

110.0
100.0
90.0
80.0
70.0
60.0
50.0
40.0

S&P 500

U.S. Post-Secondary

Corporate Training

Sources: CapTarget and PVC

Educational Content & Services

PreK-12 Education

Two Year Education Stock Price Performance by Sector

Two Year Stock Price
160.0

Prices Indexed to 100

140.0

120.0

100.0

80.0

60.0

40.0

S&P 500

U.S. Post-Secondary

Corporate Training

Sources: CapTarget and PVC

Educational Content & Services

PreK-12 Education

Education Public Company Valuation Data

U.S. Post-Secondary
Company Name

American Public Education, Inc.

Apollo Education Group, Inc.
Bridgepoint Education , Inc.
Capella Education Company
Career Education Corporation
DeVry Education Group, Inc.
Graham Holdings Company
Grand Canyon Education, Inc.
ITT Educational Services, Inc.
Lincoln Educational Services Corporation
National American University Holdings, Inc.
Strayer Education, Inc.
Universal Technical Institute, Inc.

Price
(4/4/2016)

Enterprise
Value ($MM)

Market Cap
($MM)

$20.49
$8.03
$10.16
$51.91
$4.42
$17.22
$483.33
$42.99
$2.83
$2.49
$1.64
$48.62
$4.07

$238.5
$38.1
$137.7
$523.0
$108.4
$920.5
$2,039.5
$1,932.2
$165.5
$70.1
$24.8
$415.3
$86.9

$328.9
$868.6
$466.9
$608.9
$301.0
$1,087.9
$2,258.1
$1,998.4
$67.0
$59.2
$39.6
$542.3
$98.6

(0.2%)
(16.5%)
(14.5%)
1.7%
(10.5%)
(1.4%)
(13.9%)
14.0%
(11.0%)
(25.2%)
(4.5%)
(7.1%)
(2.3%)

22.2%
11.7%
8.1%
20.8%
neg.
15.2%
16.2%
31.6%
15.6%
4.8%
5.7%
20.1%
4.6%

0.7x
0.0x
0.2x
1.2x
0.2x
0.5x
0.7x
2.5x
0.2x
0.3x
0.2x
1.0x
0.2x

0.8x
0.0x
0.3x
1.2x
0.2x
0.5x
NM
2.2x
0.2x
0.4x
NM
0.9x
0.3x

3.3x
0.1x
3.0x
5.8x
neg.
3.3x
4.2x
7.9x
1.2x
5.3x
NM
4.7x
5.3x

3.3x
0.2x
3.1x
5.6x
neg.
3.2x
NM
6.7x
2.9x
5.3x
NM
4.8x
16.9x

10.1x
10.2x
29.2x
14.7x
7.7x
7.4x
NM
15.1x
3.2x
NM
6.1x
13.3x
NM

10.6x
15.6x
27.8x
14.5x
NM
7.1x
NM
14.0x
7.5x
NM
NM
13.4x
NM

$515.4
$165.5

$671.2
$466.9

(7.0%)
(7.1%)

14.7%
15.4%

0.6x
0.3x

0.6x
0.4x

4.0x
4.2x

5.2x
4.1x

11.7x
10.1x

13.8x
13.7x

Mean
Median

3-Year
EBITDA
LTM
NTM
LTM
NTM
LTM
NTM
Revenue Growth Margin TEV/Revenue TEV/Revenue TEV/EBITDA TEV/EBITDA Price/Earnings Price/Earnings

Corporate Training
Company Name

CEB, Inc.
Franklin Covey Co.
GP Strategies Corporation
Workday, Inc.

Price
(4/4/2016)

Enterprise
Value ($MM)

Market Cap
($MM)

$63.25
$15.10
$26.37
$78.92

$2,577.8
$261.2
$492.7
$13,534.1

$2,064.9
$245.1
$441.1
$9,154.7

6.3%
4.9%
6.0%
57.4%

23.8%
13.3%
8.6%
neg.

2.8x
1.3x
1.0x
11.6x

2.6x
1.2x
0.9x
8.3x

11.7x
9.6x
11.7x
neg.

10.3x
8.0x
9.2x
99.5x

16.6x
23.3x
20.8x
NM

15.6x
20.5x
16.7x
NM

$4,216.5
$1,535.3

$2,976.5
$1,253.0

18.6%
6.1%

15.2%
13.3%

4.2x
2.0x

3.3x
1.9x

11.0x
11.7x

31.7x
9.8x

20.2x
20.8x

17.6x
16.7x

Mean
Median

3-Year
EBITDA
LTM
NTM
LTM
NTM
LTM
NTM
Revenue Growth Margin TEV/Revenue TEV/Revenue TEV/EBITDA TEV/EBITDA Price/Earnings Price/Earnings

Sources: CapTarget and PVC

Education Public Company Valuation Data

Educational Content & Services
Company Name

2U, Inc.
Barnes & Noble Education, Inc.
Chegg, Inc.
Educational Development Corporation
Houghton Mifflin Harcourt Company
John Wiley & Sons, Inc. A
Pearson PLC
Rosetta Stone, Inc.
Scholastic Corporation

Price
(4/4/2016)

Enterprise
Value ($MM)

Market Cap
($MM)

$22.74
$12.06
$4.40
$13.82
$19.69
$48.15
$8.62
$7.10
$36.98

$780.9
$840.0
$296.9
$49.4
$3,052.8
$3,231.4
$7,565.6
$108.4
$916.2

$1,045.2
$900.8
$395.8
$56.2
$2,432.1
$2,787.6
$7,082.4
$155.4
$1,201.3

34.4%
(5.8%)
8.6%
13.0%
1.3%
1.7%
(6.1%)
(9.3%)
(4.5%)

neg.
4.0%
neg.
neg.
13.4%
22.2%
20.7%
neg.
8.2%

5.2x
0.2x
1.0x
0.9x
2.2x
1.9x
NM
0.5x
0.6x

3.6x
0.2x
1.3x
NM
2.0x
1.8x
1.7x
0.6x
0.5x

neg.
4.4x
neg.
neg.
16.1x
8.4x
NM
neg.
7.6x

NM
3.8x
14.1x
NM
12.8x
8.8x
10.1x
17.3x
7.4x

NM
38.1x
NM
NM
NM
17.6x
13.0x
NM
28.0x

NM
20.1x
31.2x
NM
NM
15.9x
15.3x
NM
22.7x

$1,871.3
$840.0

$1,784.1
$1,045.2

3.7%
1.3%

13.7%
13.4%

1.6x
0.9x

1.5x
1.5x

9.1x
8.0x

10.6x
10.1x

24.2x
22.8x

21.1x
20.1x

Mean
Median

3-Year
EBITDA
LTM
NTM
LTM
NTM
LTM
NTM
Revenue Growth Margin TEV/Revenue TEV/Revenue TEV/EBITDA TEV/EBITDA Price/Earnings Price/Earnings

PreK-12 Education
Company Name

Bright Horizons Family Solutions, Inc.

Cambium Learning Group, Inc.
K12, Inc.
Nord Anglia Education, Inc.

Price
(4/4/2016)

Enterprise
Value ($MM)

Market Cap
($MM)

$64.16
$4.18
$9.95
$21.47

$4,928.7
$282.2
$227.9
$3,247.6

$3,870.9
$191.2
$388.1
$2,235.0

9.4%
(1.9%)
5.7%
33.5%

17.9%
25.8%
9.9%
19.9%

3.4x
1.9x
0.3x
4.9x

3.0x
NM
0.3x
3.5x

18.9x
7.5x
2.5x
24.4x

15.6x
NM
2.4x
13.7x

33.1x
NM
22.6x
36.2x

28.1x
NM
22.6x
27.2x

$2,171.6
$1,764.9

$1,671.3
$1,311.6

11.7%
7.6%

18.4%
18.9%

2.6x
2.7x

2.3x
3.0x

13.3x
13.2x

10.6x
13.7x

30.7x
33.1x

26.0x
27.2x

Mean
Median

3-Year
EBITDA
LTM
NTM
LTM
NTM
LTM
NTM
Revenue Growth Margin TEV/Revenue TEV/Revenue TEV/EBITDA TEV/EBITDA Price/Earnings Price/Earnings

Sources: CapTarget and PVC

Select U.S. Q4 2015 Education Merger, Acquisition, and

Divestiture Transactions

The education industry experienced an increase in transaction volume in 2015

compared to 2014. While the for-profit post-secondary sector continues to face
scrutiny, other sectors, such as educational content and services, continue to
experience a healthy level of M&A activity. The announcement of Apollo
Education Groups going-private transaction in early 2016 is notable given the
post-secondary markets turmoil over the past several years. PVC believes this
reflects a renewed interest in the sector, albeit at recalibrated valuation levels.

Select U.S. Q4 2015

Education Transactions by
Sector
2

15

10
Educational Content & Services
Corporate Training

Post-Secondary
PreK-12 Education

Select U.S. Q4 2015 Education Merger, Acquisition, and

Divestiture Transactions
Acquirer Company

Target Company

Target Business Type

12/23/15
12/17/15
12/16/15
12/15/15

Wicks Group
Thomas Jefferson University
Multi-Health Systems, Inc.
Devry Educacional do Brasil SA

Little Sprouts
Philadelphia University
Discovery Learning, Inc.
Grupo IBMEC Educacional SA

12/14/15
12/11/15
12/9/15

Kaplan International (Graham Holdings)

Apollo Global Inc.
Ringling School of Art & Design, Inc.

Mander Portman Woodward

Career Partner GmbH
Lifelong Learning Academy, Inc.

PreK-12
Post-Secondary
Educational Content & Services
Post-Secondary (Int'l)
PreK-12 (Int'l)
Post-Secondary (Int'l)
Educational Content & Services

12/9/15
12/8/15
12/8/15
12/7/15
12/2/15
12/1/15
12/1/15
11/30/15

NoPaperForms.com
Career360
Capital
Muirlands Capital, KnowledgeShares and PrudentialEducationDynamics
Constructice Media
H.I.G. Capital
Next University, Inc.
Open English LLC
UniversityNow Inc.
Penn Foster Education Group, Inc.
AKLearning, Inc.
Business Training Library, Inc.
BlueCanary Data & Analytics LLC
Blackboard, Inc.
CleanEdison, Inc.
Kaplan, Inc.

11/17/15
11/11/15
11/9/15

Fanshawe College, Endowment Arm

WorldStrides Inc.
InfoPro Learning, Inc.

HotZone Training Consultants, Inc.

International Studies Abroad, Inc.
Sherwood Learning Solutions LLC

Corporate Training
Educational Content & Services
Corporate Training

11/5/15
11/5/15
11/3/15
10/29/15
10/28/15
10/27/15
10/27/15
10/27/15
10/23/15
10/22/15
10/19/15
10/13/15
10/12/15
10/6/15
10/5/15
10/5/15
10/5/15

PowerSchool Group LLC/Vista Equity

Keypath Education, Inc.
T3 Live, LLC
Tempus Applied Solutions LLC
Circuit Technology, Inc.
Relias Learning LLC
Greenwood Hall, Inc.
Cengage Learning, Inc.
TiER1 Performance Solutions, LLC
Kaplan, Inc.
Leeds Equity Partners
Global Knowledge Training LLC
Cross Street LLC
ProQuest
International Institute for Learning, Inc.
Blackbaud, Inc.
Werner Enterprises, Inc.

InfoSnap, Inc.
GlobalHealth Education and Training
Pristine Capital Holdings
Proflight Aviation Services LLC
STC, LLC
RediLearning Corporation
Uvize, Inc.
Pathbrite, Inc.'s ePortfolio Solution
Sealund & Associates Corporation
SmartPros, Ltd.
Campus Labs
DevelopMentor, Inc.
Double Line, Inc.
Ex Libris Group
AFA Project Management Ltd.
Smart Tuition
Roadmaster Drivers School, Inc.

Educational Content & Services

Post-Secondary
Corporate Training
Post-Secondary
Corporate Training
Corporate Training
Educational Content & Services
Educational Content & Services
Corporate Training
Corporate Training
Educational Content & Services
Corporate Training
Educational Content & Services
Educational Content & Services
Corporate Training
Educational Content & Services
Post-Secondary

Announcement Date

Sources: CapTarget and PVC

Educational Content & Services (Int'l)

Educational Content & Services
Educational Content & Services
Post-Secondary
Post-Secondary
Corporate Training
Educational Content & Services
Educational Content & Services

Acquisition Price ($MM)

NA
NA
NA
$179.8
NA
105.0
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
16.4
91.0
NA
NA
NA
NA
190.0
NA

For more information, please visit www.parchmanvaughan.com

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