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While the IPO market has been meager over the past year, there still have been some bright spots, such as the offerings of e-learning companies. Some of the notable deals include Bridgepoint Education (NYSE: BPI) and Grand Canyon Education (NASDAQ: LOPE). The shares of both companies are up over 40% since their IPOs.
Well, to get a piece of the action, another e-learning operator has filed to go public: Archipelago Learning.
Through its web-based Study Island platform, Archipelago focuses on helping students from kindergarten through 12th grade. In fact, during the past school year, there were about 8.3 million students in the system.
Why all the interest in Study Island? Keep in mind that the content is customized to key standards for reading, math, science and social studies -- using interactive features (including fun games). At the same time, the system allows for tracking and assessing performance (in real-time).
Oh, and Study Island is affordable. The average annual price per student ranges from $3 or $10. The upshot is a nice business model that involves high revenue visibility and powerful cash flow generation. Last year, revenues went from $18.2 million to $32 million, with profits of about $1 million.
The lead underwriter on the IPO is Bank of America (NYSE: BAC).
Tom Taulli is the author of various books, including The Complete M&A Handbook
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