Domestic, High school / Secondary 2, Investors, Required - Written by on Tuesday, July 12, 2011 20:10 - 0 Comments

KKR, former Kaplan chief Grayer partner on deal for Education 2020

photo: Jonathan Grayer, courtesy Kaplan Inc.

The New York Times’ Dealbook blog reports on another major league deal in the private equity world in a matter of days. This time, a partnership of Kohlberg Kravis Roberts & Co. (Yes, KKR, the firm made famous in the book Barbarians at the Gate), bought Scottsdale, Az.,-based Education2020 for an undisclosed sum (thought to be $50 million, according to the Times). Partnering with KKR, Jonathan N. Grayer, the former wunderkind CEO at Kaplan Inc., (see Washington Post story on Kaplan, it’s sister company). Mr. Grayer had formed an investment partnership with KKR in early 2010, calling it Weld North. The partners looked at 350 companies in the last 18 months before this first deal on Education2020. Sari Factor, a managing director at Weld North and former K-12 division chief at Kaplan under Mr. Grayer, will be E2020’s top executive. Veteran, knowledgeable Times reporter Peter Lattman reports the following:

Despite the deal’s small size, it underscores the keen interest of private equity firms in for-profit education.

Education2020, which is known as E2020, provides online courses across 43 states in subjects ranging from algebra to earth science to “A Midsummer Night’s Dream.”

Its products focus on so-called credit recovery, the fastest-growing segment of the online education sector. The credit recovery market serves students who have fallen behind and need to take additional courses to graduate.

The company’s software aims to help cash-strapped school districts educate laggard students, getting them back on track at a lower cost. Competitors in this “credit recovery” sector include NovaNet, a unit of British media giant, Pearson. Thoma Bravo recently snatched up another rival, Plato Learning, for $143 million.
This Private Equity deal comes on the heels of Providence Equity Partners plunking down $1.6 billion for Blackboard, which makes course management software… two signs that so-called Smart Money’s burrowing into online learning and education technology:



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