Media Giant Bertelsmann Enters Online Education Market

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Global media giant Bertelsmann SE recently announced its purchase of US online-course provider Relias Learning.

Europe’s largest media company is purchasing the company for an undisclosed amount “in the mid-hundreds of millions” of US dollars in an acquisition from San Francisco-based private-equity firm Vista Equity Partners, according to a statement from the company.

The purchase is the largest US-based acquisition for the company in over 15 years since it purchased book publisher Random House in 1998, keeping with the company’s pledge to boost revenue through education and media content.  Education is forecast to become a $1.27 billion business for the company by 2018.  The company plans to continue to make purchases in the field, and currently has 3 billion euros to spend on the future acquisitions.

“The acquisition of Relias Learning is a major step on the way to making the education business a third mainstay of business for Bertelsmann alongside media and services,” Chief Executive Officer Thomas Rabe said in the statement.

Rabe said he expects “to generate a billion euros of revenue with education in the medium term.”

Currently, the global education market is worth around $5 trillion and continues to grow.  Rabe said he expects the acquisition of Relias to allow his company to “massively expand business.”

Based in Cary, North Carolina, Relias Learning employs about 300 people.  The company has over 4,000 clients and offers over 12 million online training courses, including courses geared for senior-care and health-care workers.  While the company has not reported a specific revenue number, it did report 50% growth this year.

After becoming CEO in 2012, Rabe entered the company into the education field by teaming with educational entrepreneurs in an investment fund, “University Ventures Fund,” geared toward launching degree programs and holding the goal of offering continuing education in both Europe and the US.

Bertelsmann owns several companies, including broadcaster RTL Group SA, music-rights company BMG, and book publisher Penguin Random House.  Earlier this year the company bought a stake in US education provider Udacity Inc. The Germany-based company saw a 42% growth in income last year resulting in 870 million euros.

Recently, Bertelsmann also purchased full control of German publisher Gruner & Jahr in an effort to advance its digital strategy.  The move ends a 45-year partnership with the Jahr family.