Media Fortune Fame & Folly

DMGT sells Hobsons EdTech

As foreshadowed in Flashes & Flames in December, DMGT has agreed the sale of Hobsons, its EdTech business, in two separate transactions, for total proceeds of $410m (3.5 x revenue).

Hobsons’ Naviance and Intersect businesses are being sold to US-based PowerSchool, a leading provider of K-12 education technology solutions, for $320m, and are expected to be part of PowerSchool’s unified platform.  

Hobsons’ Starfish business, after an internal restructuring where it will be spun-out from the rest of Hobsons, is being sold to EAB, a US-based education company, for $90m. Together, Starfish and EAB are expected to enhance their complementary student success capabilities in order to strengthen their support of students.  The timing of completion is subject to the customary closing conditions.

In FY 2020, Hobsons generated £6m adjusted operating profit from revenue of £85m. It self-describes as “a student success business, our mission is connecting learning to life, by matching students to opportunity across a lifetime of education decisions”.

Hobsons started life as a Cambridge, UK-based publisher of print directories on universities and graduate careers. Its acquisition by DMGT in 1990 laid the foundation for a B2B investment strategy that eventually led to the 1998 game changing acquisition of Risk Management Solutions and to a tilt away from B2C and towards B2B that had admittedly begun almost 30 years before with the launch of Euromoney. The swing away from the B2C legacy is now being re-balanced and it seems reasonable to predict future investment in new-growth broadcast and streaming services.

The family-controlled, UK listed company DMGT has a market cap of £1.7bn. Its principal brands include the Daily Mail, Mail Online, Metro, Risk Management Solutions, ADIPEC, Gastech, and Cazoo. This latest divestment represents a further focusing of the DMGT portfolio with proceeds that confirm the company’s reputation as a smart seller.