New Harbor Capital has formed Blueprint Education Holdings to acquire Blueprint Test Preparation and Next Step Test Preparation. These two independent companies were combined at closing into one platform as a first step in forming a larger test preparation company.
New Harbor identified the tutoring and test prep market as an area of investment focus and pursued Next Step since first being introduced to the company in 2015. New Harbor separately pursued Blueprint beginning in late 2016, and after realizing the numerous synergies and complementary product and service offerings, convinced both companies to pursue a merger in combination with a New Harbor recapitalization.
The investment in Blueprint Education is the second platform investment for New Harbor’s second fund which closed in June 2017 with $265 million in capital commitments.
“The combined capabilities and complementary strengths of these two companies will create a powerful platform for growth in an industry that’s begging for innovation,” said Tom Formolo, Partner at New Harbor Capital.
Blueprint Test Preparation is a provider of LSAT (Law School Admission Test) preparation services and offers in-person and asynchronous online courses, private tutoring, self-study materials and application consulting services. The company’s live classroom instruction is offered in more than 25 locations in eight states around the country. Blueprint Test Preparation, led by its co-founders Trent Teti and Matt Riley, is headquartered in Los Angeles (www.blueprintlsat.com).
Next Step is a provider of test preparation services for the MCAT (Medical College Admission Test) and other graduate admissions exams. The company offers one-on-one live online tutoring services, asynchronous online courses, and an array of self-study practice tests and materials. Next Step, led by its founder and Chief Operating Officer John Rood, is headquartered in Chicago (www.nextsteptestprep.com).
“These companies were a perfect fit with our investment thesis. We plan to leverage their unique capabilities in content production, delivery and adaptive learning as we expand our offerings in law and health, as well as horizontally into additional test verticals,” said Justin Marquardt, Vice President at New Harbor Capital.
New Harbor invests from $10 million to $40 million of equity in companies that have from $3 million to $15 million of EBITDA. Sectors of interest include growth-oriented business services companies with an emphasis on the healthcare and education industries. New Harbor was co-founded in February 2013 by Tom Formolo and Ed Lhee, long-time partners at CHS Capital, and is based in Chicago (www.newharborcap.com).
Deerpath Capital Management (www.deerpathcapital.com) provided debt financing to support the acquisitions of Blueprint Test Preparation and Next Step Test Preparation.
© 2018 Private Equity Professional | April 16, 2018