AcadeMedia

Long-term compounder in the education industry

Based in Sweden and with a market cap of €600 million, AcadeMedia ($ACAD.ST) is northern Europe's largest education company, operating pre-, compulsory, and upper secondary schools; it is also active in the counter cyclical adult education business, generating revenues for €1.5 billion (SEK17 bn).

First listed on the Stockholm Stock Exchange in 2001, it was taken private by EQT in 2010 at an equity value of SEK2.5 billion (equivalent to €260 million at the time) and then re-IPOed in 2016 at a SEK3.8 billion post-money valuation: today it’s worth SEK6.4 billion (but there was also a second capital raise in 2018 for SEK400 million to finance the acquisition of Vindora).

The biggest shareholder with a 25% stake is Mellby Gård, a Swedish family office which was one of the anchor investors at the 2016 IPO (acquiring 10% and then buying more shares from EQT when the private equity fund fully exited its investment), followed at 10% by renowned Spanish value investor Cobas Asset Management; the rest is free-float.

Similar to BioGaia, AcadeMedia is only followed by local Nordic brokers (ABG Sundal Collier, DNB and Carnegie).

Vision and operativity

While it was founded in 1996, parts of today’s ACAD go back much more than that. In 1898 Hans Svensson Hermod started the “Malmö Language and Trade Institute”, which later developed into what is today known as Hermods. And in 1968 a Romanian immigrant, Mikael Elias, who had come to Sweden in 1955 to further his studies on pedagogy, started NTI: his fundamental theory was that all individuals can learn as long as they have the appropriate attitude and conditions, with the motto: "You can become whatever you want, as long as you want it". Finally, Pysslingen was founded in 1984 and became the first in Sweden to run independent preschools.

During the 1980s Sweden banned grants for independent day care centres (the so-called Lex Pysslingen), but political reforms have since then changed the market: the independent school reform was introduced in 1992 and a large number of entrepreneurs started their own schools. Many of the education companies that are today part of AcadeMedia, such as Vittra (founded in 1993) and IT-Gymnasiet (founded in 1998) resulted from this deregulation.

ACAD operates across the education ladder with different brands and teaching models (the full list and description are available here):

• Preschool: the first step on the ladder, with brands like Pysslingen, Vittra, Noblas, Innovitaskolan and Montessori Mondials

• Primary schools: often integrated with the preschools, they also include Pops Academy (with creative activities like singing, music and dancing) and Snitz (for pupils with neuropsychiatric disabilities)

• Upper secondary schools: a large number of both theoretical and practical orientations, including music, design and technology, as well as more traditional programmes such as natural science, social sciences and economics

• Adult education: courses are conducted primarily within municipal adult education, polytechnics and employment services and cover areas such as marketing/sales, communication, game development / digitalisation, IT & technology, medical and social care and civil engineering