According to analysis contained in a Q1 2015 report from
investment banking firm, Capstone Partners, long known for their insights into
M&A and capital markets, the $788.7 billion annual spend in K-12 education
markets has become an easy target for disruptive educational technologies in
recent years, as the industry moves increasingly to modernize via digital solutions
that improve both overall systemic efficiencies, as well as student outcomes. A
company like Sibling Group Holdings, Inc. (OTCQB: SIBE), which is leveraging an
EdTech (education technology) roll-up strategy that spans eLearning and blended
learning, as well as curriculum design and backend education, is poised to
succeed mightily in this actively consolidating market.
The company’s momentum is due in large part to an already
established and increasingly strong brand presence, their acquisitive nature
and expansion of core offerings, as well as an appetite for providing
comprehensive, soup-to-nuts solutions for both domestic and global education
markets. Solutions which run the gamut from curriculum to course certification
as no other player in the industry today. Ranging from tailored Common Core and
iNACOL (International Association for K-12 Online Learning) compliant curricula
for the domestic markets, complete with assessment and course certification, to
ESL (English as a second language) minded and globally approachable frameworks.
A growing emphasis on providing solutions for the broader, underserved, and
highly lucrative international markets, will likely emerge as one of the
company’s strongest selling points long-term.
Capstone’s Q1 report on the education market was
particularly focused on M&A activity within the sector, making the case
that the projected acceleration of such activity in coming years – driven in
large part by attractive valuation multiples resident in buyout target
technologies and capabilities that will help companies thrive as the industry
rapidly evolves – was the strongest indicator of how factors like eLearning are
revolutionizing the industry worldwide. Sibling Group’s Blended Schools Network
(BSN) business unit (http://blendedschools.net) is a perfect example of
transformative eLearning in this space, as it provides some 192 Common Core compatible
master courses for K-12 and does so via a Learning Management Systems (LMS)
that tracks student activity and results, while also providing a hosted
environment that enables course authoring.
BSN features educational technology company Instructure’s
cloud-native Canvas LMS, in addition to complete online Language Institute
courses covering a wide variety of languages from Chinese to Latin, all of
which are oriented along current ESL parameters. The BSN curriculum was
recently certified in California according to the University of California’s
A-G requirements (all subjects from History and Social Science “A” to
College-prep and elective “G”), when Mountain House High School took their
personalized learning initiative to the next level and worked with SIBE to
create a BSN-based personalized learning environment. This was a huge win for
SIBE, as California is the largest K-12 market in the country, with around
$76.6 billion in total K-12 funding budgeted for this year, and General Fund
resources of $109.4 billion.
One of the biggest changes in the industry is to the roughly
$14 billion textbook market, which has historically been in the iron grip of a
tiny handful of companies like Pearson and McGraw-Hill. This market is under
immense pressure today from eLearning and the continuing shift to digital and
open-access education formats, with increasingly popular educational
alternatives like EdX, MIT OpenCourseware, and Coursera threatening to be the
extinction level event that wipes out such dinosaur textbook companies. BLS
data makes the case quite clear as to one major reason for the extinction of
antiquated print textbooks, showing an 800 percent rise over the past three
decades in the cost of such books, a rise outpacing the CPI by 550 percent, and
even outpacing fast-rising medical services by as much as 225 percent.
Hence the ongoing arms race in eLearning, where companies
like MOOC-focused (massive open online courses) Coursera have added a number of
schools, courses and languages to their basket in recent years. Or companies
like Chegg, Inc. (NYSE: CHGG), which used to focus on renting/selling
textbooks, has executed a series of key acquisitions over a similar time span,
with a decided emphasis on transitioning to an all-digital footprint. Chegg did
a spate of acquisitions last year, spending a total of $57.7 million in cash
and stock in order to pick up college coupon book mavens The Campus Special,
online/on-demand video tutoring services provider InstaEDU, and internship
marketplace interactive tools and services provider Internships, LLC.
In this light, SIBE’s acquisition of Urban Planet Mobile™
(UPM), a platform designed to teach people all over the world the English
language, which caters specifically to mobile delivery, makes a great deal of
sense. Especially considering Gilfus Education Group’s projections that the
global K-12 education market will soar to $2.9 trillion by 2017, led by
countries like China and India, as well as the GCC (the Persian Gulf states
excluding Iraq), where TechNavio forecasts a CAGR of over 3 percent through
2019. UPM, via patent-pending design and delivery, makes lessons available on
any mobile, not just the latest smartphones, making the platform ideal for
countries like India, where mobile coverage far exceeds the coverage of ESL
class availability.
SIBE’s recent announcement of a strategic partnership and
$3.75 million funding arrangement with PRC-based international education
management and consulting company, Shenzhen Times, which develops and sells
everything from computer networks and software, to communications products,
gives UPM access to a massive K-12 market worth well over $172 billion. A
market which is projected to grow at a CAGR of 12 percent through 2018. With
broad traction across not only the education market, but on into the healthcare
and literacy markets, UPM has the potential to see a good deal of upside from
SIBE’s expansion into China and the company is not intent to rest on their
laurels here either. Sibling Group plans to expand further into the burgeoning
global eLearning and mEducation markets, leveraging a host of compelling
products and services.
Pure-cloud modular LMS developer Docebo recently forecast
the self-paced global eLearning market alone as climbing to $51.5 billion by
next year and the ongoing M&A activity within the EdTech sector is a clear
indication of how hot the market is, and will likely remain for some time.
TechNavio forecasts for the global eLearning market as growing at a CAGR of
nearly 26 percent through 2018 and SIBE’s EdTech roll-up strategy, where they
look to become one of the key players in the delivery and management of
educational content, makes them an exciting landmark to check out amid the lush
eLearning landscape. The company’s distinct advantage of being a single source
vendor that can provide a complete, curriculum to course certification solution
set, including the comprehensive course authoring tools and systems needed to
help maximize student outcomes and better train educators, sets SIBE apart from
the competition very clearly.
Take a closer look at SIBE by visiting www.siblinggroup.com
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