In support of a private equity client’s investment consideration, Stax evaluated the growth outlook and positioning of a provider of software solutions to the education industry.
In order to provide our client with an understanding of the achievable market size and future growth opportunities of the target company, Stax sought to determine the stability of the current customer-base, drivers of customer loyalty and adoption, current market size and market potential, and the competitive strength of target’s position within the market.
The first phase of the engagement focused on identifying any red flags or deal-breaking investment issues, and phase two gauged future adoption potential and growth outlook for the company.
As part of our analysis, Stax engaged in conversations with universities and educational institutions to understand current customer dynamics and how well aligned the Target was with industry trends. In phase two, we leveraged market insights to determine current and future adoption, how usage/adoption differs by institution type, current mix of software solution deployment, and how this was expected to change.
The client went on to pursue the investment and subsequently won the deal.
We found largely positive prospects for the Target, with widespread adoption of their solutions expected to continue. It was well-positioned with a good brand reputation and a diverse product offering. Additionally, the Company was in a strong position to drive growth through both new school adoption and increased classroom penetration.
Overall, Stax determined that the Target was a worthwhile investment, which was well-positioned to capitalize on a fast growing market.