It's college graduation season again. Graduates are already sending out thank-you notes to those who helped them along the way. According to the PitchBook Platform, some of those thank-you's could be sent to private equity investors.
Since the beginning of 2005, PE firms have backed 112 U.S.- or Canada-based companies that are in or serve the higher education market. Deal activity in the space has cooled in the past few years after hitting 22 and 24 deals in 2007 and 2008, respectively. Firms haven't shied away from making big investments recently, though, as the $2.4 billion carveout of McGraw-Hill Education (March 2013) and the $1.64 billion buyout of Blackboard (October 2011) indicate.
Not many corners of the market went untouched by PE investors in the timeframe. Firms invested in colleges themselves, sometimes acquiring whole schools and institutes—typically technical schools, community colleges and career centers. Also popular among investors were publishers, both online publishers and physical book publishers. One big investment theme has been the online space, where more and more of the collegiate experience is taking place. Not only are classes themselves on the Internet, so are things like class project management (Blackboard) and homework assessment (Sapling Learning). Students can't do everything online, however. Things like laundry, for instance. They may not know it, but private equity has them covered there, too.