trends and transactions in private post-secondary education

MODERATOR:

Alexander B. Kasdan, Managing Director, DelMorgan & Co.

EXPERT PANEL:

Keith Zakarin, Partner, Chair of Education Practice, Group Duane Morris LLP

Robert S. Lytle, Partner, Co-Head of Education Practice, The Parthenon Group

Neil Morganbesser, President and CEO, DelMorgan & Co.

TRENDS AND TRANSACTIONS IN

PRIVATE POST-SECONDARY EDUCATION

June 5, 2014

1

Alexander B. Kasdan, Managing Director, DelMorgan & Co., has more than twenty years of investment banking, real estate, corporate law and corporate strategy experience. Mr. Kasdan has executed over 100 domestic and cross-border transactions totaling more than $10 billion in overall volume in a variety of industries. Prior to joining DelMorgan, Mr. Kasdan founded Convergence Capital Partners, LLC, a boutique investment banking advisory and real estate investment firm and was an investment banker at Peter J. Solomon Company, Credit Suisse First Boston and Merrill Lynch, in New York and Moscow, Russia. Mr. Kasdan practiced law with O’Melveny & Myers LLP (formerly O’Sullivan Graev & Karabell LLP) and Paul, Hastings, Janofsky & Walker LLP (formerly Battle Fowler LLP), where he specialized in mergers and acquisitions, private equity and corporate finance transactions. In addition, Mr. Kasdan served as Corporate Counsel in charge of business development at Schlumberger Ltd., a global oilfield and information services company. Mr. Kasdan graduated magna cum laude from Middlebury College with a B.A. degree in Economics and Italian and was elected to Phi Beta Kappa during his junior year. In addition, he holds a J.D. degree from Columbia University Law School and has studied at the University of Florence in Italy. Mr. Kasdan is admitted to the Bar in the State of New York. Mr. Kasdan is a Senior Advisor to Governance and Transactions LLC, an advisory firm established in 2003 by Mr. James L. Gunderson, former Secretary and General Counsel of Schlumberger Limited, to assist boards, management and owners with corporate governance, compliance, structuring and strategic transactions.

100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 +1 (310) 980-1718 [email protected] www.delmorganco.com

2

Keith Zakarin is the chair of Duane Morris' Education Practice Group and is a member of the firm's Partners Board. Mr. Zakarin exclusively represents private postsecondary schools and colleges. His representation of these schools nationwide includes such diverse areas of law as student and employee litigation, regulatory and administrative counseling and litigation, mergers and acquisitions, accreditation counseling and advocacy, employment counseling and risk management. Mr. Zakarin is not just a lawyer representing colleges; he owns and operates an accredited private college. Mr. Zakarin is a 1986 graduate of the University of California, Berkeley, Boalt Hall School of Law, and a summa cum laude graduate of the University of California at San Diego.

750 B Street, Suite 2900 San Diego, CA 92101-4681 +1 (619) 744-2278 [email protected] www.duanemorris.com

3

Robert S. Lytle is a partner and Co-Head of The Parthenon Group’s Education Practice. For more than 15 years, he has led client engagements on general strategy, performance improvement, and investment due diligence across a broad spectrum educational organizations. Robert’s clients include high-growth companies, publicly listed Global 100 companies, non-profit institutions, financial investors, and international governments. In addition, Robert has participated in numerous high-profile corporate turnarounds, mergers, divestitures, and privatizations in Europe, North America, Latin America, the Middle East, and Asia. Robert is a frequent speaker at leading global forums in the education sector. Prior to joining Parthenon, Robert was with Bain & Company and served as a U.S. Army aviator. He holds a B.S.E. in Economics from the Wharton School of Business and an M.B.A., with high distinction, from the Tuck School of Business at Dartmouth.

50 Rowes Wharf Boston, MA 02110 +1 (617) 478-7096 [email protected] www.Parthenon.com

4

Neil Morganbesser is co-Founder and President & CEO of DelMorgan & Co. where he provides senior leadership within the firm and helps oversee all client engagements. Mr. Morganbesser is also CEO of Globalist Capital LLC, DelMorgan’s broker-dealer affiliate. Mr. Morganbesser has over 20 years of experience providing financial and strategic advice to a full range of clients, including entrepreneurs, large corporations, governments, family businesses, private equity funds, and special committees of public companies. Mr. Morganbesser has been affiliated with some of the leading institutions in the world, and his experience ranges from representing the offshore owners in the sale of a small, private U.S. company for $10 million to representing the special committee of a large, public company in a $9 billion negotiated management buyout with a highly complex financial structure. Mr. Morganbesser has truly global experience with the most sophisticated transactions, across a broad range of industries and in a large number of jurisdictions, as the lead banker on a wide variety of transactional and other advisory assignments, including domestic and cross-border mergers, acquisitions, joint ventures, sales and divestitures, restructurings, special committee assignments, unsolicited acquisitions and hostile defense. With transactional experience in over 30 countries, Mr. Morganbesser has successfully advised on over 75 transactions. Until May 2008, Mr. Morganbesser was the head of West Coast and Asia Mergers & Acquisitions at Bear Stearns & Co., as a Senior Managing Director based in Los Angeles. Prior to joining Bear Stearns in May 2001, Mr. Morganbesser was an investment banker in the Mergers, Acquisitions and Restructuring Department at Morgan Stanley (in New York from 1993-1998 and in Los Angeles from 1998-2001). From 1990-1993, Mr. Morganbesser was a corporate and M&A attorney at the preeminent New York law firm of Wachtell, Lipton, Rosen & Katz. Mr. Morganbesser graduated with an A.B. magna cum laude in Applied Mathematics / Economics from Harvard University (Phi Beta Kappa) in 1986 and received his J.D. and M.B.A. degrees (Order of the Coif, with honors) from Stanford University in 1990.

100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 +1 (310) 319-2000 [email protected] www.delmorganco.com

5

ORGANIZER & HOST: Anna Spektor is the Founder and host of Expert Webcast, a sophisticated digital source of expertise for the professional and the business communities domestically and internationally. Producing the industry’s leading webcast panels covering corporate, M&A, restructuring and finance topics, Expert Webcast addresses timely and relevant issues faced by general counsel, C-level executives, boards of directors, business owners and their advisors, as well as institutional investors.

100 Wilshire Blvd. Suite 750 Santa Monica, CA 90401 +1 (310) 995-6579 [email protected] www.expertpresence.com

6

MAJOR TOPICS •  Current investment climate and market in private post-secondary

education •  Key federal and state regulatory issues that affect risk, pricing

and structure •  Student and employee litigation and risk management •  Identification of risk indicia and risk assessment •  Trends in auction activity and related purchase and sale strategies •  Case studies

7

OVERVIEW OF THE POST-SECONDARY SPACE

•  Enrollments o  Macro-economic cycle o  Difference between two and four year schools o  Online competition from traditional schools

•  Deal activity o  Exiting PE players too long in the tooth o  Smaller schools with exiting owners o  Some large (5,000 students +) that won’t wait any longer o  Regulatory issues driven deals, especially 90-10

8

OVERVIEW OF THE POST-SECONDARY SPACE

•  Key federal issues driving deals o  Gainful employment considerations; expensive degree

programs in particular – 90-10 plays, especially training schools

o  Overall nastiness in the space by the feds causing owner fatigue

o  Composite-score driven deals

•  Accreditation environment and its affect on deals o  Regionals not willing to play ball on for-profit conversions

(Thunderbird) o  Push at the ED level to federalize accreditation has created a

reactionary climate as the accreditors, particularly the nationals. This creates instability

o  Diligence on placement outcomes important

9

TRANSACTIONAL ENVIRONMENT IN THE POST-SECONDARY SPACE

•  Range of deal pricing o  Auction activity still highest, except in troubled school deals o  Small schools trade at 3-5x EBITDA o  90-10 plays at significant premiums to EBITDA o  Regulatory clarity has substantial impact on pricing

•  Successful deals •  Emphasis on regulatory basics, especially outcomes •  More exotic 90-10 situations pre-cleared with ED more often •  More modeling on GE •  Deep evaluation of student ROI – both good for the overall

value proposition and good for metric compliance

10

WHERE IS THE SECTOR HEADING?

•  Differentiation increasingly important •  Persistence, persistence, persistence •  Deeper channel partnerships (e.g., uniformed services and

corporate) •  Innovation toward competency-based degrees •  Price battles

THE PARTHENON GROUP

Key Issues and Trends in For-Profit Higher Education

Parthenon Perspectives

June 2014

THE PARTHENON GROUP

2

0.0

0.5

1.0

1.5M

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

5%

15%

('99-'12)CAGR

-5%

0%

('12-'19)CAGR

2 Year For-Profit4 Year For-Profit

0

5

10

15M

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2 Year For-Profit

4 Year For-Profit

2 YearNot-For-Profit

4 YearNot-For-Profit

2%

2%

15%

5%

('99-'12)3%

CAGR

0%

-2%

0%

-5%

('12-'19)-1%

CAGR

Enrollments: Macro Economics Enrollments across all institution types are expected to flatten or decline slightly over the next 5-7 years

H F

Post-Secondary Enrollments, 1999-2019F

Source: Parthenon HED Enrollment Forecast

H F

For-Profit Institution Enrollments, 1999-2019F

THE PARTHENON GROUP

3

Enrollments: Macro Economics Parthenon models post-secondary enrollments using a number of independent market drivers

Source: Parthenon Analysis

4-Year Not-for-Profit Enrollment Model

Drivers

4-Year Student Age-Weighted

Population

Unemployment & Mean Weeks Unemployed

Trend Towards Higher Education

4-Year For-Profit Enrollment Model

Drivers


For-Profit Enrollment Trend

Private Sector Real SG&A

(Marketing spend)

2-Year Not-for-Profit Enrollment Model

Drivers


Population


Trend Towards 2-Year Education

2-Year For-Profit Enrollment Model

Drivers


Share of Enrollment Online

Lower 2 Income Quintile Access to Higher Education

2-Year Undergraduate

Tuition

Not-for-Profit Enrollment For-Profit Enrollment

Private Sector Real SG&A

(Marketing spend)


Population


Population

THE PARTHENON GROUP

4

Enrollments: Macro Economics Enrollment drivers are fairly common across sub-sectors and consider underlying factors and recent trends

• Population weighted by age groups relevant to 2-year, 4-year and post-secondary institutions; more potential students leads to higher enrollments

• Represents the duration for which workers remain unemployed; less confidence in job prospects after prolonged unemployment lowers interest in education

• Unemployed workers traditionally return to school to improve job prospects

Higher Education Enrollment Drivers

Driver Impact Description/Rationale Models

Weighted Population of Student Demographic

4NFP 2NFP

4FP 2FP

Unemployment 4NFP 2NFP

4FP 2FP

Average Weeks of Unemployment

4NFP 2NFP

4FP 2FP

Private Sector Real SG&A • Metric for marketing spend by for-profit institutions; marketing has a positive impact on enrollment in for-profit institutions

4NFP 2NFP

4FP 2FP

Positive Industry Penetration of For-Profit Education

• Increasing trend towards attaining post-secondary education that that impacts for-profits; impact has since started to taper

4NFP 2NFP

4FP 2FP

Share of Enrollment Online • Captures the shift to online learning which benefits enrollment of for-profit institutions, which over-index online

4NFP 2NFP

4FP 2FP

2-Year Undergraduate Tuition • Higher tuition levels discourage enrollment

4NFP 2NFP

4FP 2FP

THE PARTHENON GROUP

5

Enrollments: Traditional Sector Competing Strong traditional brands are now targeting the same students as the for-profit sector

0

20

40

60

80

100%

AllUniversities

ProgramsOfferedOnline/Hybrid

Tier-IUniversities

ProgramsOfferedOnline/Hybrid

ProgramsNot Offered

Online

Programs NotOffered Online

0

20

40

60

80

100%

Institutions' Online/Hybrid Status

Not Online/HybridOfferings

OfferOnline Courses(But No Online

Programs)

Online/ HybridDegree Program

3.6K

Percent of Completions Where Online/Hybrid Programs are

Offered in Program Area, 2011

Public and Not-for-Profit Institutions, Percent Offering

Online/Hybrid, 2011

Note: “Traditional Institutions” excludes private sector institutions; Fully online programs denote programs in which there are zero on-campus course requirements for completion; Hybrid program requirements vary but hybrid programs typically have greater than 60% of coursework offered online; Academic Professionals include Chief Academic Professionals such as Deans or Provosts Source: Peterson’s Distance Learning Database;; IPEDS;; Deutsche Bank;; School Websites;; Barron’s Ranking of Post-Secondary Schools

Babson Group’s Annual Survey: Going the Distance:

Online Education in the United States, 2011:

• 65% of institutions said

online learning is, “a critical part of their long-term strategy”

• 67% of academic professionals rated online education courses as the same or superior to face-to-face instruction

• 70% of academic professionals believe students are as satisfied with online courses as they are with face-to-face

THE PARTHENON GROUP

6

0

2

4

6K

0.3K

2012

PurelyOnline

5.5K

107%

2008

('08-'12)CAGR

$115MEst. Revenue

0

20

40

60

80

100K

2008

27.6K

2012

PurelyOnline

82.6K

32%

('08-'12)CAGR

$523MEst. Revenue

Southern New Hampshire University Enrollment

University of Southern California Enrollment

Enrollments: Traditional Sector Competing Traditional institutions are coming online and when they act commercially, they tend to thrive…

Arizona State University Enrollment

Liberty University Enrollment

0

4

8

12K

2007

2.7K

2012

Purely Online

20.0K

49%

('07-'12)CAGR

$106MEst. Revenue

0

2

4

6

8K

2010

2.5K

2012

Purely Online

6.5K

61%

('10-'12)CAGR

$46MEst. Revenue

Source: University financial statements, university websites, Fast Company, Deutsche Bank Report, NYT, Parthenon analysis

THE PARTHENON GROUP

7

Enrollments: Traditional Sector Competing …their brands are powerful…

0.0

1.0

2.0

3.0

4.0

6/20

07

6/20

08

6/20

09

6/20

10

6/20

11

6/20

12

6/20

13

Not for Profit

For Profit

Index of Google Searches for Top For-Profit and Not-For-Profit Institutions, 2007-2014

Note: For profit index consists of “University of Phoenix”, “Ashford University”, and “Kaplan University”;; Not for profit index consists of “Liberty Online University”, “Western Governors University”, and “SNHU”. Indices are indexed to one for the beginning period and represent a rolling 6-week average. Source: Google Trends

(Liberty, WGU, SNHU)

(U of P, Ashford, Kaplan)

THE PARTHENON GROUP

8

Company Select Partners

Enrollments: Traditional Sector Competing ...and they often partner with third party online enablers

http://www.purdue.edu/

THE PARTHENON GROUP

9

Regulatory Issues While all regulatory issues require monitoring, Gainful Employment (GE) is the primary current issue

Higher Education Act

Gainful Employment (as proposed) Cohort Default Rate 90/10 Revenue

Percentage Accreditation

Reform Title IV

Safe Harbors

Regulatory Status

• HEA is reauthorized every few years by Congress, and is set to expire this year

• Unlikely to be acted on until after the November midterm elections

• Limitations (repayment rates >45% and/or debt burdens <8% of total income) struck down in 2012

• DoE released new draft in Dec. 2013; final draft to be released in March before public comment period

• Three-year CDRs will be enforced starting in 2014

• Schools with a three-year CDR >30% for three years will face sanctions; the 40% one-year threshold was unchanged

• No pending changes

• VA benefits are included in the 10% – possibly up for debate

• Possibility of just including Title IV eligible students in calculations

• Under Sen. Lee’s (R-Utah) proposal, states could opt to set up their own accreditation organizations

• New York already follows this model

• Obama endorses tying performance metrics to fed aid

• DOE eliminated 12 “safe harbors” in 2010

• For-Profits attempting to have several of those safe harbors restored

• Action unlikely in 2014

Commentary

• “I highly doubt congress will deal with this in 2014, even though it is set to expire. They’ll wait for after the elections and probably just keep things the same” – Senior VP, Inifilaw

• “They came back with round 2 and came back that they want stricter rules because of the language they got. This won’t be good at all for the for-profits” – Principal, Ritzert Leyton

• “They are easy to manipulate, our overall takeaway is don’t be that concerned, only the bad schools and programs will be affected” – Senior VP, EDMC

• “The for-profit graduate schools have a large number of students who don’t take Title IV funding, so they’re not really at risk here” – Former Federal Regulatory Affairs Manager, Kaplan

• “I don’t think anything will happen here until 2015, probably 2016 at the earliest” – Veterans of Foreign Wars of The United States, Legislative Associate

“I don’t see any change here in the near future. They can’t enforce them anyway” – Former Higher Ed Legal and Regulatory Consultant, Apollo Group

Threat to For-Profits

Source: DOE, PBS, US News and World Report, Inside HigherEd, FinAid, Parthenon Interviews

High Low

THE PARTHENON GROUP

10

Regulatory Issues The current draft of GE regulations place aggressive thresholds on debt-to-earnings and cohort default rates

Metrics Annual Debt-to-Earnings (aDTE) Discretionary Debt-to-Earnings (dDTE)

Program Cohort Default Rate (CDR)

Population Measured Completers Completers & Non-Completers

Categories and Thresholds Pass: Annual DTE≤8% OR Discretionary DTE≤20% Zone: • 8%<Annual DTE≤12% OR • 20%< Discretionary DTE≤30% Fail: Annual DTE>12% AND Discretionary DTE>30% Note: 10-Year Amortization Period

Pass: Program CDR<30% Fail: Program CDR≥30%

Ineligibility Rules (metrics operate independently of each other)

A program becomes Title IV ineligible for 3 years if:

• It fails in any 2 out of 3 years, OR

• Does not pass in any 1 out of 4 years (time for zone programs to improve before ineligibility)

A program becomes Title IV ineligible for 3 years if:

• The 3-year default rate of 3 consecutive cohorts of students is greater than or equal to 30%

Restrictions • Written warnings to students if a program could become ineligible for Title IV funds for the next award year (applies to zone & failing programs)

• Title IV enrollment limited to previous year’s level for failing programs (or after third year of being in zone)

• Written warnings to students if a program could become ineligible for Title IV funds for the next award year

• Title IV enrollment limited to previous year’s level if program could become ineligible at the end of the year

Source: DoE

Must Pass One Metric from Each Column to Pass GE

THE PARTHENON GROUP

11

Reasserting Growth How does the sector get back on a growth trajectory?

Persistence, Persistence, Persistence 1

Focus on the Adult Learner 2

Consolidate and Drive Efficiencies 3

Redeploy Capital 4

Look Towards Services Markets 5

THE PARTHENON GROUP

12

0

20

40

60

80

100%

Reasserting Growth: Persistence, Persistence, Persistence Overall outcomes (for-profit, non-profit, public) are disappointing and persistence has compelling economics

Sources: IPEDS

0

20

40

60

80

100%80%+

50%-79%

20%-49%

Less than 20%

3,898

Percent of Institutions with Given Graduation Rate

Lifetime Cohort Revenue

Per

cent

of L

ifetim

e R

even

ue

Percent of Starters

Attract More

Increase the persistence and graduation rate

Should we start them?

THE PARTHENON GROUP

13

Reasserting Growth: Focus on the Adult Learner Distinct student groups with different sets of needs can be reached through innovative course offerings

Onl

ine

Offe

rings

“Traditional” Students Career Enhancers Self-Directed Learners

Online/hybrid courses for campus-based first-time

full-time students

Fully-online and competency-based

degree programs for adults looking to enhance

their employment prospects

Open-Access Options (MOOCs, OER, OCW, etc.)

for a wide age range of students seeking to

accelerate credit accumulation at a

very low cost

Requ

irem

ents

for

Succ

ess

• Tight coordination with onsite courses

• Supplemental student supports to drive student engagement

• Continuous starts, competency options

• Close alignment with labor market needs

• Quality evaluation frameworks and testing policies to allow for awarding of credits

THE PARTHENON GROUP

14

Reasserting Growth: Focus on the Adult Learner Pushing innovation in competency-based programs while leveraging channel partners can combat traditional brands

Why a Competency Orientation? Why Channel Partners?

• Supports students desire for a practical employment focused education

• Aligns with employer needs while still providing the “certification” of a degree

• Can support a lower cost structure

• Leverages the channel partners brand

• Long term better student acquisition model

• Keeps institution attuned to shifting employer needs and forces a responsive curriculum and pedagogy

THE PARTHENON GROUP

15

Reasserting Growth: Consolidate and Drive Efficiencies The market is highly fragmented, utilization is low, and business processes are becoming more crucial

Program Design Inquiry Admission Fin Aid Onboarding

Instruction & Student Support

Exit Processes

Accounts Receivable Collection

THE PARTHENON GROUP

16

Reasserting Growth: Redeploy Capital Global education markets are fueled, primarily, by rising household wealth…

Threshold For Private Schooling

90’s 00’s 10’s

Per

cent

of H

ouse

hold

s

Household Income

Households which can afford higher quality education (primary, secondary, or tertiary) for their children

Distribution of Household Income

The relationship between household income and attainment of higher quality education (private schooling) is not a 1:1. Instead, as HH income rises over time, the number of families that are able to send their children to private schools increases in a greater proportion than household income

As average household income rises, the number of households above the private education affordability threshold rises more quickly

THE PARTHENON GROUP

17

Redeploy Capital Wherever income is rising, so too is the demand for post-secondary education

100%

1999

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19991999

19991999

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2007

PPP adjusted GNI per Capita

$0 $20,000 $40,000 $60,000

Enr

ollm

ent R

atio

0%

20%

40%

60%

80%

Tertiary Gross Enrolment Ratio (GER) vs. Income, 1999 and 2007 (80 countries from around the world)

Note: UNESCO’s Gross Enrolment ratio ISCED 5 and 6. This ratio is calculated using the number of pupils enrolled in International Standard Classification of Education (ISCED) level 5 and 6 representing stages of tertiary education, regardless of age, expressed as a percentage of the population in the five-year age group following on from the secondary school leaving age Source: BMO Capital Report (2009); UNESCO; World Bank

THE PARTHENON GROUP

18

Reasserting Growth: Look Towards Services Markets Higher education institutions are increasingly embracing business processes

Note: *Aramark was founded in 1936 and AVI Food Systems in 1961 but it is not known when they started servicing universities **Bisk was founded in 1971 as a test prep company but did not enter online program development until 1998

Spectrum of University Functions That Have Been Managed by Vendors (Representative, not Comprehensive)

Document & Data Storage

Finance & Accounting

Human Resources

Financial Aid & Student

Loans

Information Systems

Management Dormitories

Food Service

IT Support Institutional & Operational Support Enrollment Management Academics

Online Platform

Instruction

Course Development

Back End Front End Academic Core

Exam

ple

Vend

ors

• XACT Telesolutions (1976)

• Infosys (1981)

• Affiliated Computer Systems (1988)

• Sallie Mae (1972)

• Nelnet (1977)

• Royall & Co (1989)

• ESM (1995) • QuinStreet

(1999)

• InsideTrack (2001)

• Embanet-Compass (1995)

• Deltak (1996) • Bisk (1998*) • Learning House (2001) • Academic Partnerships

(2007) • 2Tor (2008)

• Educational Housing Services (1987)

• Aramark*

• AVI Food Systems*

1970s-80s 1990s-Today Inception of Outsourcing:

?

Univ

ersi

ty F

unct

ions

Marketing & Recruitment

Student Coaching

Market Penetration of Outsourcing:

THE PARTHENON GROUP

19

Reasserting Growth: Look Towards Services Markets There is significant institutional spending in areas that could benefit from partnerships

Source: Parthenon analysis

Back End Front End

0

20

40

60

80

100%

IT Support

Currently Partner-Supplied

$15B

Finance andAccounting

$7B

HR

$3B $2B $2B

Admissions

$11B

Development andAlumni Affairs

$6B

Financial Aid and Student LoansEndowment Management

$1B

Marketing and Recruitment

Total = $47B

Institutional Support Student Services

Relevant Categories of Post-Secondary Institutional Expenditure

THE PARTHENON GROUP

20

What Informs Our Perspective? Parthenon teams have completed over 900 education projects in more than 60 countries

Pre-Kindergarten K-12 University Vocational and Other

Career and Professional

Education Sector Projects Completed by Parthenon

Parthenon Offices

THE PARTHENON GROUP

21

What Informs Our Perspective? Public and private sector work provides a strong sense of what is happening “on the front lines”

We advise leading education institutions…

• Federal, state, and local educational authorities

• Charter schools, private K-12 schools, and other innovative education providers

• Global post-secondary institutions

• Foundations on the forefront of education reform

…work with the organizations that help meet their needs…

• Educational publishing

• Testing and assessments

• Tutoring

• Intervention

• Special Education

• Technology providers

• Consumer education products

…and cover almost every large and mid-sized

transaction in global markets

• North America

• Latin America

• Europe

• Gulf Cooperative Countries

• Africa

• Asia, Southeast Asia, and Asia-Pacific

THE PARTHENON GROUP

22

About The Parthenon Group and our advisory services for investing in education

About The Parthenon Group

The Parthenon Group is a leading advisory firm focused on strategy consulting, with offices in Boston, London, Mumbai, San Francisco, and Shanghai. Since its inception in 1991, the firm has embraced a unique approach to strategic advisory services built on long-term client relationships, a willingness to share risk, an entrepreneurial spirit, and customized insights. This unique approach has established the firm as the strategic advisor of choice for CEOs and business leaders of Global 1000 corporations, high-potential growth companies, private equity firms, educational institutions, and healthcare organizations. The Parthenon Group advises clients in all stages of investing in education companies, including target identification and screening, strategic due diligence, portfolio company strategy and operational improvement, and sell-side support. The combination of Parthenon’s Private Equity Practice, which has advised clients on more than 1,000 transactions, and our Education Practice, which has worked across all aspects of for-profit and non-profit education, make The Parthenon Group the preeminent advisor to private equity firms considering investments in the education industry. Learn more about us at www.parthenon.com.

Robert Lytle Partner, Co-Head of Education Practice [email protected] 617.478.7096 Executive Assistant: Deb Spitzley [email protected] 617.478.6312

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Advisory Services for Investing in Education

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