Education: 2023 M&A Deal Roundup and Trends to Watch Out for in 2024 (L.E.K. Consulting)

Summary

• Global M&A deal value contracted 25%-30% to ~$2.5T in 2023, while education transaction volume grew by 1% compared with 2020.p.5
• PreK-12 and related services accounted for ~44% of global education deal value in 2023, experiencing a ~12% growth since 2022.p.5
• In 2022-23, developed markets allocated ~40% of education investments to PreK-12 and K-12 services.p.11
• Corporate buyers comprised ~48% of disclosed education M&A deal volume in 2023, outpacing private equity sponsors at ~43%.p.10
• Employers estimate that 44% of workers' skills will be disrupted through 2027, increasing focus on workforce training and reskilling.p.22

Key insights

1. Quarterly education M&A transaction values began stabilizing in 2023 after a multi-quarter decline since Q3 2021.p.7
2. North America retained global market leadership by capturing ~40% of disclosed education deal value in 2023.p.12
3. Asia saw several private equity transactions in higher education during 2023 that collectively amounted to ~$2B.p.12
4. Direct US federal funding provided ~$2.2B in FY23 to support school safety and student mental health initiatives.p.33
5. US K-12 school districts utilized an average of ~2,591 edtech tools per district in 2023.p.35
6. Education represented ~$3.5B or ~2% of the estimated total global spend on AI-centric systems in 2023.p.39
7. B2C edtech platforms in APAC are shifting toward offline brick-and-mortar learning centers to deliver blended education models.p.43