Target Company Overview

Modern Campus is a prominent provider of student lifecycle management software tailored for higher education institutions. The company serves over 1,500 educational organizations, including public and private universities, community colleges, and technical training schools. Modern Campus's software solutions focus on enhancing non-degree programs for non-traditional students, while also offering robust capabilities in web content management, student engagement, and curriculum as well as course catalog management.

Industry Overview

The education technology sector has experienced significant growth in recent years, with a marked increase in demand for solutions that facilitate the management of student lifecycle processes. In the United States, higher education institutions are actively seeking innovative tools to engage their diverse student populations and streamline operational efficiencies.

This trend is particularly relevant as institutions are expanding their offerings to accommodate non-traditional students. Educational organizations are diversifying their curriculum and exploring various formats, including online and hybrid learning, thereby necessitating sophisticated management solutions to support these changes.

Moreover, the growing emphasis on digital transformation within the education sector further stimulates demand for effective software solutions. Educational institutions are increasingly leveraging technology to enhance student experiences, improve retention rates, and optimize academic outcomes, which bodes well for companies like Modern Campus that specialize in this area.

As a result, the higher education technology market within the United States remains a competitive and thriving environment, ripe with opportunities for innovation and expansion. The pressures of an evolving educational landscape ensure that institutions will continue to seek partnerships with technology providers capable of addressing their unique challenges.

Rationale Behind the Deal

The successful sale of Modern Campus to Providence Equity Partners marks the culmination of a strategic partnership that began with Riverside's investment in May 2018. During Riverside's tenure, the firm effectively implemented a comprehensive growth strategy, which included six strategic add-on acquisitions to enhance Modern Campus's market reach and software capabilities.

This transaction is driven by Riverside's vision of transforming Modern Campus into a leading player in the education technology space. The involvement of Providence Equity Partners is expected to facilitate further growth and development as they bring additional resources and expertise to support the company's future endeavors.

Investor Information

The Riverside Company is a global investment firm specializing in investments in the smaller end of the middle market. With a strong track record in the education and training sector, Riverside has invested in over 120 companies across various educational levels, including pre-K, K-12, higher education, and corporate training. Their extensive experience and proven operational framework have positioned them as experts in identifying and nurturing high-potential opportunities in this industry.

Riverside's skilled team includes seasoned leaders like Managing Partner Loren Schlachet, who has emphasized the firm's commitment to driving transformational growth in education technology. With a strategic focus on enhancing operational capabilities and leadership within their portfolio companies, Riverside has established a reputation for delivering substantial value to its investments.

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The sale of Modern Campus represents a strategic move within the education technology sector, emphasizing Riverside's adeptness in maximizing investment potential. Their approach of executing a well-defined M&A and operational playbook has proven successful, leading to notable growth in both market presence and software capabilities for Modern Campus.

From an investment perspective, this transaction could be deemed a robust decision as the partnership with Providence Equity Partners is likely to catalyze further advancements. Their involvement is expected to bolster Modern Campus's growth trajectory, possibly leading to substantial returns in the long run.

Moreover, Riverside's active role in enhancing leadership and restructuring operations has set a solid foundation for Modern Campus. Such strategic initiatives are indicative of a forward-thinking investment approach, positioning the company well for sustained success.

In conclusion, the exit from Modern Campus can be viewed as a hallmark of Riverside's investment strategy. Their exemplary stewardship not only amplified the company's capabilities but also reflected a deep understanding of the higher education market's dynamics, making the overall investment a sound decision with promising returns.

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