- Trends within regulated markets are putting online training and certification companies on investors’ radar.
- 360training is a standout asset due to its robust regulatory-approved eLearning content library, scalable organic customer acquisition model, regulatory management capabilities, and proven M&A strategy.
- Businesses that are best positioned to win in this space showcase several key attributes.
Harris Williams recently advised 360training, a leading online training and compliance platform, on its significant equity investment from GreyLion Partners (GreyLion) and Vestar Capital Partners (Vestar).
Here, senior bankers from the Harris Williams Technology Group and Business Services Group share trends driving investor interest in the online learning sector, traits that make 360training a strong asset in the market, and advice for investors entering the space.
Four Trends Creating Investor Interest
Regulated markets—including construction, manufacturing, healthcare, food and beverage, real estate, and financial services—have a wide range of employee training, skilling, and compliance requirements, creating a constant need for regulatory-approved eLearning and certification solutions.
“Professionals and organizations in these industries must navigate an increasingly complex regulatory environment that often requires a combination of initial training, continuing education, examinations, and certifications to obtain and retain jobs, and keep a workforce compliant,” says Leed.
Structural challenges in regulated labor markets, like higher job creation and employee turnover, further benefit online learning providers and powers recurring demand. Leed adds: “eLearning platforms that can train new workers entering these high-demand fields are increasingly essential and best-positioned to capitalize on this opportunity.”
Shift to Online Learning
While many regulated markets still have in-person training components, there is an ongoing shift to more convenient, cost-effective digital and mobile options. “COVID-19 accelerated this trend, creating a greater need to provide remote workers with mandated education and an expanding market for seamless online training delivery across devices, technologies, industries, and geographies,” explains Lewis.
Although uncertainty is growing in today's economy, regulated markets are typically countercyclical and recession resistant. “During a downturn, people often swap jobs, supplement their incomes with side jobs, or further their education to make themselves more marketable,” notes Szyndlar. “These behaviors contribute to a steady influx of new employees, making eLearning platforms an excellent opportunity for investors looking for assets with non-discretionary demand.”
The online learning industry has high fragmentation across end markets, geographies, and providers of regulatory-approved content and certifications. “There are very few businesses that cater to a national client base or variety of regulated end markets, setting up a substantial opportunity for consolidation and professionalization,” says Lewis.
Winning Traits of 360training
360training specializes in regulated end markets, transforming the way professionals and companies navigate complex state and nationally mandated training requirements and certifications. It maintains one of the largest libraries of high-quality content approved by all relevant regulatory bodies. Plus, it delivers this content across digital formats and devices, allowing people to get the job training they need whenever and wherever they need it.
“360training’s secret sauce is its regulatory framework and management system,” explains Titterington. “With its recent investment from GreyLion and Vestar, it has the people, processes, and technology in place to easily acquire additional training assets and go deeper into its current markets or expand into new areas of regulated training at scale.”
“HIPAA Exams, TIPS, and VanEd are all great examples of successful, highly accretive acquisitions,” adds de Fiebre. “Through its established regulatory management capabilities and M&A integration process, 360training is able to strategically leverage M&A to broaden its offering with regulatory approvals in new states, integrate new content onto its platform, and further expand its presence in new and existing markets.”
Another differentiator is 360training’s unique and scalable organic customer acquisition model. It has perfected the most efficient way to acquire new customers, both professionals and organizations, that are seeking jobs and training in these regulated spaces. The company’s investment in a multi-brand and multi-channel distribution strategy has facilitated strong organic growth, which has accelerated through tuck-in acquisitions.
“360training is a proven M&A platform. It has a unique ability to identify, acquire, and integrate assets of all sizes and in a variety of markets, and quickly realize synergies and growth. GreyLion and Vestar remain committed to the buy-and-build strategy as they look to continue scaling the business,” says Leed.
Key Advice for Investors
For training and certification assets, it’s essential to offer on-demand online training options that meet complex regulatory requirements while being convenient to access and complete at any time. Szyndlar adds: “It’s also important to focus on regulated, compliance-mandated training content due to the non-discretionary, recurring nature of continuing education requirements.”
Additionally, due to the sector’s high fragmentation, growth through acquisition and platform-building can help assets expand their capabilities and content libraries. By consolidating the market, investors can gain content approvals, buy established content brands, and enter new industries that can accelerate growth.
“This strategy allows investors to acquire businesses with strong brand recognition and content that's already approved by regulators,” explains Leed. “You can streamline the approval process and quickly enter a new market, which is a crucial value driver for investors looking at the space.”
Untapped Value in Regulated Markets
eLearning companies—especially those serving regulated markets—present excellent value-creation opportunities for investors thanks to recurring demand, and high fragmentation.
As a leading platform with one of the broadest libraries of digital training content spanning multiple regulated industries, 360training is a prime example of a top-performing, high-growth company in the space.
To learn more, please contact our senior bankers.