Early in the year, PAX Corporate Finance announced the completion of a fundraising transaction for WebForce3, the fourth in the training sector in just a few months. This is an opportunity for our teams to look more closely at the dynamics of a sector in which investor interest and valuations are continuing to increase.
In less than 18 months and only on the French market, many groups have conducted major strategic operations. Galileo (Studialis), Webforce3 and Amos have all strengthened their capital. ESO Suposteo, Silva Terrade, 3W Academy, EDH, Eductive and Ipesup have all changed shareholder. Finally, Mediaschool increased its acquisitions thanks to support from the 123 IM investment fund.
This exceptional dynamic is down to very strong market growth and the direct consequence of this can be seen in the sector’s valuation levels, which outperform those of many other industries. School group valuations are currently trading at an average of around 12x EBITDA and even more for those that have developed innovative models, are in strong growth or which constitute strategic assets of the right size.
Smaller transactions benefited from the strongest ripple effect, allowing a high level of valuation to be maintained at the start of 2018. This momentum is not expected to fizzle out, since a number of investment funds with holdings in the sector are reaching the end of their investment cycle. Such deals are likely to be accepted by any colleagues that have not yet managed to gain a foothold in the education sector.