Over the past year, eCollege
eCollege develops e-learning platforms for colleges, universities, and K-12 schools. Its Datamark division also provides enrollment marketing services.
In fiscal Q1, eCollege's e-learning division posted a healthy 23% increase in revenue, to $14.8 million, and a 46% increase in "adjusted EBITDA," to $4.9 million. Unfortunately, Datamark's been more problematic. In Q1, revenues sank 12% to $13.5 million. Not even Pearson wants this dubious division; eCollege's new parent has agreed to sell it for $41 million to investor group Oakleigh Thorne.
The Pearson deal values eCollege at nosebleed levels of 7.3 times full-year revenues, based on the company's 2007 guidance. Yet for a company of Pearson's size, the impact will likely be neutral to full-year earnings. Pearson will also be able to leverage eCollege's platform across its extensive customer base.
The deal is a bright note for others in the sector, including Blackboard
Study up on further Foolishness:
- Blackboard Gets High Marks
- Foolish Forecast: Final Exams at eCollege
- eCollege.com Drops a Class: Fool by Numbers
Fool contributor Tom Taulli, author of The Complete M&A Handbook, holds no financial position in any company mentioned above. He's currently ranked 2,093 out of 28,784 rated players in Motley Fool CAPS.