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Exclusive: After Sylvan, Unleashed Brands is hungry for more deals

Illustration of a chalkboard with three digital-style dollar signs on it.

Illustration: Brendan Lynch/Axios

Unleashed Brands, a youth development platform, remains acquisitive after its purchase of Sylvan Learning, CEO Michael Browning tells Axios.

Why it matters: The global education market could reach an estimated $8 trillion in value by 2030, as advances in technology drive growth to the sector.

What's happening: Seidler Equity Partners-backed Unleashed is "out in the marketplace looking for the next world class brand," Browing says.

  • The company is interested in areas like swimming and fine arts, including music, theater, dance and traditional sports, he adds.

Catch up fast: Unleashed Brands acquired Sylvan, which provides supplemental education for K-12 students, for $185 million from Franchise Group, sources say. Browning declined to comment on the valuation.

  • The competitive auction process for Sylvan, run by investment bank Boxwood Partners, began several months ago.
  • The deal was financed with a mix of debt via two lenders and equity, with Seidler providing financial advice.

The big picture: The pandemic was an educational setback for most children, with many now behind on reading and math.

  • Browning says Unleashed customers were asking for after-school tutoring, which made Sylvan a prime investment.

By the numbers: The acquisition adds more than 500 locations to the 860 units Unleashed Brands already operates, as well as offers online courses, Browning says.

  • It will increase its systemwide sales from about $800 million last year to $1.2 billion, he says.
  • Unleashed brands Urban Air Adventure Park, Snapology, The Little Gym, XP League, Class 101 and Premier Martial Arts attracted 25 million annual visits last year.

What's next: Unleashed Brands will add another 120-plus new locations this year across its brands, before accounting for Sylvan.

The intrigue: Unleashed Brands, with a valuation well north of $1 billion, is in "striking distance" of an IPO, Browning says.

  • It also has the management team and infrastructure in place for a public offering, Browning says.

Yes, but: The company is not targeting an IPO any time soon, he says.

State of play: Education is increasingly a popular category with private equity firms, with several inking deals in recent months.

  • Golden Vision Capital's recapitalized edtech company Hawkes Learning in September 2023.
  • Leeds Equity Partners acquired early education provider Blue Marble Academy in January.
  • Avathon Capital bought early childhood education centers Magical Beginnings, also in January.
  • Bain Capital Double Impact invested in edtech company Branching Minds this month.
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