One of the best-known organizations in the education testing market, the American Institutes for Research, announced Thursday it is selling off its assessment portfolio to Cambium Learning, saying it will pour the profits from the sale back into its research, evaluation, and other work.

AIR has a major footprint in assessment. The nonprofit organization says it administers online tests in more than 20 states and delivered assessments to more than 60 million students last year.

The organization has had several suitors looking to buy its assessment portfolio over the past decade, and it gave serious consideration to them before deciding that Cambium Learning — which is controlled by a private-equity firm — was the right match, said David Myers, AIR’s president and CEO.

“This gives us the ability to go in a more expansive way into AIR’s mission,” Myers said in an interview. “We thought with the resources we have, it will give us the ability to do some things we haven’t before…This is an exciting time for what will remain at AI, and what will go to Cambium.”

Terms of the deal were not disclosed.

About 600 of the 1,800 employees at AIR work in its assessment division, which was founded in 2007. Most of them are based in the organization’s Washington D.C., headquarters in the city’s Georgetown neighborhood, and they learned of the deal on Thursday.

AIR’s assessment division has grown rapidly over the past decade, particularly as states looked for assessments — and for all of the reporting, scoring, and test-item work that goes with it — during the dawn of the Common Core State Standards era.

The organization’s aggressive tactics and competitive zeal have occasionally chafed others in the testing field, a level of friction Education Week examined in a 2014 story.

The remaining 1,200 or so AIR employees outside of assessment focus on professional services, such as research, evaluation, and technical assistance, including work performed on behalf of federal, state, and foundation clients, Myers said.

Rise of District-Level Tests

Much of that non-assessment work in research and evaluation at AIR focuses on education, and that concentration will continue, he said.

“Education was the cornerstone of this organization” when it was focused on assessment,  the AIR official said, and education “will remain the cornerstone going forward.”

No layoffs are expected as part of the acquisition; the assessment expertise of AIR’s staff is a critical piece of what makes the deal attractive to the buyers, Myers said.

AIR’s decision to sell off its assessment division was driven partly by overall shifts in the testing market, Myers said. There is increasing demand, and market opportunity, in district-level assessments, such as formative assessment. But AIR’s leadership, including its board, questioned whether the organization should make that transition.

“We’ve done really well in the state market, but there are different challenges when you go to the district market,” Myers said.

“We asked ourselves, ‘Were we the right organization to take assessment there, and for it to reach its potential?’ This is an opportunity to place assessment with a group that could better equip it to go forward.”

AIR assessment staff have been reaching out to the organization’s state and other clients, to make clear their services will not be disrupted by the changeover, Myers said.

The news of the sale of AIR’s assessment portfolio surprised Scott Marion, the executive director of the Center for Assessment, which consults states and districts on testing issues, partly because of the sheer scope of the vendor’s work across the country.

“They’ve risen to the top,” Marion said of AIR, in terms of winning state contracts.

A big part of AIR’s legacy has been its prowess in creating effective online tests – particularly computer-adaptive tests – at a time when many large-scale vendors were struggling to get them off the ground.

“They anticipated the computer-adaptive testing market before anybody,” he said, and despite some setbacks, “they were able to put a platform out there without the system crashing.”

The marriage of an organization with state-testing experience with Cambium. a company focused on classroom-level curriculum and resources, makes sense and it reflects where the market is headed, Marion added.

He sees a parallel between the AIR-Cambium deal and last year’s merger of another vendor heavily invested in state testing, Measured Progress, with AdvancED, a school accreditation and contracting organization. (Last week the organizations announced they are rebranding under the name Cognia.)

The state testing market might seem attractive and lucrative, but it can be a perilous one for vendors, Marion said. State policymakers are continually demanding that vendors produce and administer high-stakes tests that are “faster tests that do more things,” and if a company makes a mistake, it ends up incurring public wrath and demands for damages from the state.

As a state testing vendor, “unless you feel you’ve got your system locked down,” the market can be high-risk, Marion said. In AIR’s case, “they can actually [put out a statewide] test, really well.”

State-Testing Shortage?

Last December, Cambium was acquired by Veritas Capital, a private equity firm. Based in Dallas, Cambium delivers ed-tech, instructional resources, software as a service, and other products and services to school districts.

Cambium has extensive experience with curriculum, which Myers said is a natural bridge to classroom-based instruction at the district level. The company’s portfolio includes Learning A-Z, which delivers reading, writing, and science products; and Explore Learning, which focuses on online math and science simulations and other resources; as well as Voyager Sopris Learning, and VKidz Learning.

“As a leading provider of digital assessment, AIR Assessment is an ideal partner for Cambium Learning as we seek to help all students reach their potential,” said John Campbell, CEO of Cambium Learning, in a statement. “Working together, we are excited to build upon both AIR Assessment’s and Cambium Learning’s digital content to provide schools and districts with the most effective tools that are aligned to their curriculum and strategic goals.”

Ramzi Musallam, the CEO and managing partner of Veritas added in the statement that the acquisition will create an “education technology platform providing end-to-end instruction and assessment.”

The overall number of major vendors working in the state testing market – the ones who, like AIR, have the staffing and expertise to deliver those high-stakes tests – has fallen in recent years, partly because of all the challenges heaped on companies, and that’s troubling, said Marion.

Fewer companies means fewer options for states to choose from, and an erosion in the number of vendors who can meet states’ myriad demands, he said.

“There’s a crisis in the large-scale testing industry,” he said. “This stuff is technically tricky, to do it well…You need that capacity.”

Without it, he said, “something’s going to break.”

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See also:

• Testing Vendor’s Legal Fight, Growth Attract Attention
• Common-Core Testing Contracts Favor Big Vendors