Tech Education Startup General Assembly Goes to Adecco for $412.5 Million

Tech Education Startup General Assembly Goes to Adecco for $412.5 Million

Recruitment agency Adecco Group announced on Monday that it is acquiring digital retraining firm General Assembly for a whopping $412.5 million.

Founded in 2011, General Assembly teaches employees skills such as web development, user experience design, digital marketing, and, increasingly, data science and machine learning. Headquartered in New York, the company runs 20 facilities around the world, where individuals can enroll themselves in full-time courses, paying tuition that often totals more than $10,000 per course.

Since its founding, the company has received about $120 million in venture capital financing from firms including Advance Publications, the New York-based newspaper publisher and broadcasting company, and Institutional Venture Partners, the Menlo Park, California-based venture investor.

Zurich-based Adecco said the acquisition would help establish itself as a “leader in the fast-growing up/reskilling segment,” and would complement the human resources services it already offers. It said the acquisition would be “modestly dilutive” to Adecco’s 2018 earnings and would be accretive to earnings from 2019 onwards.

The company also said that General Assembly had been experiencing 30 percent compounded annual revenue growth, and that its profit margins were above the Adecco Group’s average. General Assembly’s revenue in 2017 was $100 million.

The deal is expected to close in the second quarter of 2018, pending regulatory approvals.

According to terms of the deal, General Assembly will continue to operate as a separate division, led by its Founder and Chief Executive Officer Jake Schwartz, who will report to Sergio Picarelli, a member of Adecco’s executive committee.

“General Assembly is currently in a high-growth investment phase and is therefore expected to be modestly dilutive to Group earnings in 2018, the impact of which is included within the group’s current guidance on planned strategic investments,” Adecco said in a statement. “From 2019, General Assembly is expected to be modestly accretive to earnings,” it added. “In the medium-term General Assembly’s EBITA (core earnings) margins are anticipated to be significantly higher than the group average.”

“The takeover price is high,” ZKB said. “However, there is a significant synergy potential and the growth profile of Adecco is slightly improved.”

Following this news, Adecco’s shares fell 0.7 percent in early trading in Zurich

Megha Shah
Megha Shah
A dreamer, traveler, aspiring entrepreneur and a bookworm beyond repair, Megha Shah is extremely fond of writing and has been doing so since she was a child. Apart from being a part-time writer, Megha is currently in college, pursuing B. Com. (Hons). Megha is an ardent follower of ‘Hardship, Hustle and Heart’ and firmly believes in the power of hard work and destiny!

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