The Education market represented $833 billion of spending in 1998, or roughly 10% of GDP
in the United States. What was traditionally a highly fragmented market is being developed
and rationalized in both the public and private sectors. A new emphasis on customer service
is evolving and consumer expectations are increasing. In the K-12 arena, charter schools
and outsourced school management are gaining acceptance and improving school
performance. At the college level, private for-profit universities are delivering results. There
has been a move beyond the traditional classroom into non-traditional methods of learning
at all levels. The traditional four-year degree is evolving into a lifelong learning experience
that may or may not commence in college. An increasingly large proportion of expenditures
will be available to the for-profit sector as a wide variety of functions are outsourced for
efficiency. New methods of education delivery are being enabled by new technology and this
technology, offering leverage, economies of scale and personalization will drive adoption.
Thus classroom instruction is evolving into digital learning; children's toys and games have
developed educational purposes or aspects. Education and Training companies provide
products and services to a diverse demographic group of individual and corporate consumers
with educational and training needs for increasing earning power, professional development
and personal enrichment.
In view of the growth and anticipated rationalization in the sector, we believe that there will
be significant demand for assistance in corporate financings, mergers and acquisitions,
restructurings, operational refocusing and resource redeployment that will stabilize and focus
companies and plot a path to profitability under new market conditions.
The Education and Training Market bears many similarities to the Healthcare market of the
1970's. It is highly fragmented, subject to widespread consumer dissatisfaction,
predominantly low technology, under-managed, marginally profitable and heavily under-
represented in the Capital Markets. Throughout the Eighties and Nineties, the Healthcare
Market experienced a systemic transformation, similar to that which industry experts believe
has begun in the Education sector. Epic Partners believes that investing capital and
providing active financial and management expertise to dynamic and innovative companies
within this high growth sector will generate very attractive investment returns.
The Principals believe that their unique blend of demonstrated expertise and experience in
education, private equity, investment banking, restructurings and turnarounds and their
familiarity with early stage companies' operations offer a compelling combination to
companies seeking merchant banking assistance in this rapidly moving field.
