By Jenny Kirkham, Cortus Advisory Group

The education and training sector continues to show strong performance in UK M&A – with EdTech and apprenticeships remaining particularly buoyant. Whether its corporate buyers consolidating a fragmented market or private equity firms chasing scalable platforms, there’s no shortage of appetite.

But if you’re thinking of buying (or selling) in this space, here are a few things I’ve seen repeatedly shape how deals play out – both in terms of what’s hot and what knocks value.

What’s Driving Activity?

1. Digital transformation:
   AI-led learning platforms are leading the charge. Investors love anything with automation, personalisation and demonstrable outcomes. The more modular, bite-sized and flexible the content, the better it resonates with new-generation learners.
2. The apprenticeship boom:
   Since the introduction of the Apprenticeship Levy in 2017, we’ve seen huge consolidation – and the subsector remains one of the busiest corners of the market. With a tight employment landscape and growing need to upskill the workforce post-Covid, it’s easy to see why.
3. Compliance (yes, really):
   The ever-expanding compliance landscape – from quality assurance to safeguarding – is creating both risk and opportunity. It’s pushing some providers to exit while making others attractive acquisition targets due to robust processes.

What Can Go Wrong in Diligence?

If you’re looking to maximise value – or avoid paying over the odds – here are the four common tripwires we see:

1. Quality metrics: A history of compliance issues or underwhelming learner outcomes will hurt you. A lack of consistent, trackable quality data is just as bad.
2. Funding risk: Completion and pass rates matter. Most funding is tied to outcomes – if those dip, future income could be in jeopardy. No matter how shiny the front end, if the learners aren’t completing, that’s a big red flag.
3. Forecasting follies: We’ve seen businesses load their models with the kitchen sink – new contracts that haven’t yet materialised, heroic assumptions on headcount or pass rate improvements with no basis in fact. Buyers will dig in, and if the numbers don’t hold up, valuations drop fast.
4. Revenue recognition issues: If revenue has been recognised too early – especially in apprenticeship or licensing models – it can paint a misleading picture. A restated P&L late in the day will erode trust and value.
5. Understanding of the regulatory landscape: From January 2026, funding will be cut from level 7 Apprenticeships (equivalent to a Masters) in order to redirect investment to younger learners (16 – 21) to improve youth unemployment. Understanding the mix of courses provided, where funding will come from and risks to receipt of ongoing funding is hugely important in understanding value.

And What About EdTech?

Valuation multiples here can be high – particularly where platforms show strong recurring revenue and AI capabilities. We’ve seen:

• 4–5x revenue or 12–15x EBITDA at the top end
• Pure SaaS platforms often commanding higher multiples than blended digital/in-person models

But be aware of the nuances:

• Recurring vs re-occurring revenue: They sound the same, but investors treat them very differently. Recurring is contractual. Re-occurring is hopeful.
• Deferred income clarity: If it’s not clear how revenue is unbundled, recognised, and deferred, diligence becomes messy – and multiples fall.
• Tech stack articulation: What’s proprietary? What’s still in development? How much investment is needed post-acquisition? These answers matter.
• Usage data: In B2B2C models, data on actual learner engagement is often weak – but it’s increasingly a must-have in justifying valuations.

Final Thoughts

Education is changing – fast. The way people learn, the way services are delivered, and the regulatory backdrop are all evolving. If you’re preparing for a transaction, make sure your numbers, narrative and tech story are all in shape. And if you’re buying, diligence needs to be detailed and focused – especially around revenue, quality and scalability.

If you are looking for a partner in growth, someone to provide honest, commercial and focused advice and to work alongside you to get your transaction done, sharing our years of expertise in this sector, please do give us a call.