What ETS's Acquisition of ACT Actually Means

Written by Michael McKenna, Director of Tuck Advisors. To receive regular updates, subscribe to his LinkedIn newsletter.

Long before I ever evaluated a testing company as a business, I was on the other side of the desk, sweating through one myself.

To become a teacher in Pennsylvania, I had to pass the Praxis. To become a principal, I had to pass another round of Praxis exams before the state would allow me to lead a building. I remember exactly what that felt like: the study guides, the testing center, the wait for a score that would decide whether the career I wanted was actually available to me. That's ETS. Multiply that by every state that requires a Praxis series for licensure, and you start to see how much of the American teacher pipeline runs directly through this one organization.

And then, as a principal and later a CAO, I stood on the other side of that same relationship with ACT. "Testing season" meant proctoring schedules, calculator checks, and a gymnasium full of juniors filling in bubbles on a Saturday morning they'd rather have spent anywhere else. For those students, the ACT was one of the most consequential mornings of their high school career, a number that colleges would set against years of transcripts and, fairly or not, sometimes weigh more heavily than anything else.

That's the thing about the businesses I write about in this newsletter. Curriculum platforms and data dashboards shape what happens inside a classroom. Praxis and the ACT shape whether someone gets to have a classroom at all, as a student moving toward college or as an adult trying to become the teacher standing at the front of it. Few products in education carry that kind of gatekeeping weight.

So when ETS announced it was acquiring ACT, I read the release twice. Not because the logic was hard to follow, but because it confirmed something I've felt building for a while: the assessment industry itself is now going through the same consolidation pressure I've spent this newsletter describing in curriculum, instruction, and EdTech.

Setting the Stage

ETS is the nonprofit behind TOEFL, GRE, Praxis, and TOEIC — the standard-bearer for graduate admissions, English proficiency, and educator certification. ACT, Inc. is the for-profit organization behind the ACT college readiness exam, WorkKeys, and a broad portfolio spanning PreACT, ACT Academy, and career-readiness credentialing. For most of my career, these two organizations occupied different lanes: ETS owned graduate and professional measurement, ACT owned the K-12-to-college on-ramp, with the SAT as its rival at that same on-ramp.

On June 30, 2026, ETS announced it was acquiring ACT. In the words of ETS CEO Amit Sevak, the goal is helping students and families "expand access to education and job opportunities across America." ACT CEO Steve Tapp framed it as a scale play: joining ETS gives ACT "the platform to fulfill our mission at a scale we couldn't reach alone." ACT customers and partners should see no near-term disruption to existing products, and ACT gains immediate access to ETS's measurement research and AI-enabled assessment capabilities.

Read the full release here: ETS Acquires ACT, Expanding Pathways to Opportunity Across America

Fewer Students, Higher Stakes

Here's the part of this story that doesn't make it into the press release: the ACT has been losing ground for years, and this deal has to be read against that backdrop.

Roughly 1.38 million students took the ACT in 2025, down from 1.78 million in 2019, a drop of nearly 400,000 test-takers in six years. The SAT tells a similar, if less dramatic, story, slipping from 2.22 million test-takers to roughly 2 million over the same stretch. Neither test has recovered the ground it lost when the pandemic pushed college admissions toward test-optional policies almost overnight.

That shift has stuck. More than 90 percent of four-year colleges in the U.S., over 2,000 bachelor-degree-granting institutions, were not expected to require ACT or SAT scores for fall 2026 admission. The number of colleges still mandating a test score barely moved, ticking up from 154 schools for fall 2025 to 160 for fall 2026. A handful of selective institutions have reinstated testing requirements over the past two admissions cycles, but test-optional and test-blind policies remain the default across American higher education, not the exception.

I sat with that context for a while, because it reframes what ETS is actually buying. This isn't an acquisition of a business riding a growth curve. It's an acquisition of a legacy brand with real relationships in states and districts, tested demand in Praxis-style licensure and Praxis-adjacent workforce credentials, and a college-admissions core that is shrinking as a share of what determines a student's path forward. That's not a reason to doubt the deal. If anything, it's the clearest explanation for why ETS wants ACT's WorkKeys and career-readiness portfolio as much as it wants the college entrance exam itself. When the four-year, test-required pathway keeps narrowing, the organizations that survive are the ones that can prove they measure something colleges, employers, and states all still need, whether or not it's called the ACT.

Running It Through the Framework

In my advisory work, I evaluate EdTech acquisitions using The M&A Analyzer by Tuck Advisors™. Here's how this deal scores.

Mission Alignment

This is where the deal reads as more than a roll-up. Both organizations describe themselves in almost identical terms: mission-driven measurement institutions built to help people demonstrate what they know and move toward opportunity. ETS's stated purpose is advancing the science of measurement to power human progress. ACT describes itself as guiding every learner along every pathway. Neither organization built its identity around a single test; both built it around readiness. Mission alignment: high.

Product Fit and Portfolio Synergy

Before this acquisition, ETS's portfolio was strong on the graduate, professional, and English-proficiency side but thin on the K-12-to-college on-ramp. ACT was the reverse: dominant in high school readiness and workforce credentialing through WorkKeys, but without ETS's depth in graduate admissions and certification testing. Put together, a state or district can now access a continuous measurement pipeline — PreACT in middle school, ACT in high school, WorkKeys for career readiness, and GRE, TOEFL, or Praxis further down the road — under a single organizational umbrella. That's not two overlapping tests merging. It's a readiness pipeline being assembled end to end. Product fit: very high.

Market Opportunity

The market opportunity here isn't really about test volume as the college-entrance side of this business isn't growing. If this deal were purely about defending the traditional college-entrance exam, I'd score this criterion much lower.

But that's precisely why WorkKeys matters so much to this analysis. The real opportunity isn't in test volume, it's in where standardized assessment sits in a labor market being reshaped by AI. Employers are asking harder questions about what a credential actually signals, and WorkKeys already answers a version of that question for millions of job seekers, independent of whether a student ever sets foot in a college-admissions testing center. Pairing that workforce-readiness engine with ETS's research infrastructure and its reach into K-12 and higher ed positions the combined organization to own the full arc from "am I ready for college" to "am I ready for this job," at exactly the moment when the first half of that arc is shrinking and the second half is becoming more urgent. Market opportunity: high, contingent on how quickly the combined organization shifts its center of gravity toward workforce and credentialing rather than college admissions alone.

Customer Overlap and Distribution Leverage

ACT brings something ETS has never fully had: deep, trusted relationships with states and districts, earned over 65-plus years as their go-to assessment. ETS brings scaled infrastructure, measurement research, and reach into higher education and workforce credentialing that ACT could not build alone. The overlap in customers is real, but the products they're each known for are complementary rather than duplicative, which is what makes the distribution story compelling instead of redundant. Distribution leverage: high.

Integration Complexity and Execution Risk

Here's where I'd counsel patience. ETS is a nonprofit; ACT has operated as a for-profit entity. Merging those cultures, incentive structures, and governance models is rarely as simple as a press release makes it sound, and I've watched enough district-facing acquisitions to know that "no disruption to products or services" is a promise that has to be earned month by month, not announced once. There's also the matter of public perception — a testing landscape that consolidates around fewer organizations will draw scrutiny from state policymakers and families who already view standardized testing warily. Execution risk: moderate and worth watching closely.

Where This Sits in the Tuck Advisors M&A Matrix

This deal sits primarily in Cell 3, Same Customers with Complementary Products. But there's a meaningful extension into Cell 4: ACT's WorkKeys portfolio pushes ETS further into workforce readiness — a space adjacent to, but distinct from, ETS's traditional academic and certification tools. This isn't two competitors buying down the competition. It's a strategic assembly of complementary measurement tools serving overlapping populations across K-12, higher education, and the workforce.

Check out Tuck Advisors M&A Matrix.

What This Means — Depending on Who You Are

If you lead a district or state: Watch how quickly PreACT, ACT, and WorkKeys start to talk to each other operationally. If ETS delivers on a genuinely connected readiness pipeline rather than a holding-company arrangement, that's a meaningfully different value proposition than the one you're used to evaluating from either organization alone.

If you're an EdTech founder or investor: This is a signal that "readiness," not testing, not content, not curriculum, is becoming the organizing category buyers care about. The companies that can connect a credential to a demonstrable outcome, the way WorkKeys already does for employers, are the ones that will draw this kind of strategic interest.

If you're a policymaker or advocate: Consolidation at this scale in the assessment space deserves scrutiny, not alarm. Two organizations serving the same schools and families are now one. Whether that strengthens the pathway from classroom to career, or simply narrows who gets to define what "ready" means, will depend entirely on how the integration is executed over the next year.

Back to That Gymnasium, and Back to That Testing Center

Both of these tests, for all their differences, do the same fundamental thing: they hand an individual a number that shapes what happens next. The ACT decides, in part, which colleges feel within reach. The Praxis decides whether someone gets to stand in front of a classroom at all. Neither test-taker, in that moment, is thinking about market consolidation. They're thinking about a door that might open or close based on a score.

That's the tension every deal in this newsletter eventually comes back to. The businesses combine, the platforms integrate, the strategic logic gets sorted into cells on a matrix. But underneath all of it, these organizations hold real power over individual pathways — into college, into a career, into a profession that requires state licensure just to enter. Whatever ETS and ACT build together, that's the standard worth watching them against: not just what it does for shareholders and market share, but what it does for the people whose futures still run through a testing center.

If this analysis was useful, share it with a colleague who sits at the intersection of education and business.

If you're a founder, investor, or leader in the education space, let's connect!