2026 State of the RTO and CRICOS Market – Australia

Opening context

This market update provides a grounded assessment of how the Australian RTO and CRICOS transaction market has evolved over the second half of 2025 and into early 2026. It reflects observed buyer behaviour, completed transactions and failed deals, rather than sentiment or theory.

The commentary is relevant to RTO owners considering an exit, prospective buyers assessing acquisition risk and advisers supporting transactions across valuation, compliance and deal structuring. It is particularly relevant in a market that has shifted from momentum-driven activity to evidence-based decision-making.

What emerges clearly is a sector that remains active and investable, but materially more disciplined. Value is still being paid, but only where risk is understood, explained and governed.

 

A more forensic and disciplined transaction environment

Over the past six months, buyer behaviour in the RTO market has become notably more forensic. Engagement remains strong, with thousands of active buyers participating, but decision-making has slowed and scrutiny has intensified.

Headline pricing alone is no longer sufficient to progress a transaction. Buyers are increasingly relying on market evidence, documented performance and forward-looking risk assessment rather than historic reputation or assurances. Due diligence is deeper, takes longer and is no longer treated as a formality.

A positive by-product of this shift is a reduction in speculative or low-quality interest. Fewer tyre-kickers are entering transactions, while better prepared buyers are more likely to proceed through to completion.

 

Risk recalibration and conditional confidence

Confidence in the RTO sector has improved, but it is conditional. Buyers remain active, but tolerance for uncertainty has materially reduced. Where risk cannot be explained or controlled, it is no longer ignored or priced optimistically.

Buyers are asking sharper questions about how the business performs today and how it will respond to regulatory, funding and labour market pressures tomorrow. Historical profitability on its own is no longer accepted as a proxy for quality or future value.

This has widened the gap between RTOs that are genuinely investment-grade and those that are simply operationally profitable but structurally fragile.

 

Days on market and deal velocity

While average days on market briefly extended during 2025, this has begun to compress again, particularly for well-prepared businesses. High-quality RTOs with clean documentation, audit-ready compliance and realistic pricing are still transacting.

However, completion timeframes are longer and more controlled. This is not friction for its own sake. It reflects a market that now treats casual transactions as unacceptable and rewards businesses that can withstand scrutiny.

Where vendors trade price certainty for speed, deals can still move quickly. Where vendors remain anchored to outdated expectations, transactions tend to stall or fail.

 

Compliance as a commercial discipline

The introduction of the 2025 RTO Standards marked a clear inflection point. Six months on, compliance is no longer treated as a future issue or a theoretical framework.

Buyers are not expecting perfection. What they are assessing is whether an RTO can explain its compliance position, evidence decision-making and manage risk transparently. Where this capability exists, confidence follows. Where it does not, risk is priced aggressively.

Ongoing integrity enforcement has removed weaker operators from the market. While disruptive in the short term, this has had a positive longer-term impact by improving buyer confidence and rewarding disciplined operators.

 

CRICOS value is no longer assumed

CRICOS registration is no longer automatically viewed as an upside. In many transactions, it is the first area buyers seek to neutralise, carve out or restructure.

This does not indicate weakness in the international education sector. Providers with genuine delivery capability, clean agent relationships and transparent governance continue to attract strong interest. What has changed is that CRICOS value must now be demonstrated rather than assumed.

Some buyers prefer acquiring a clean domestic RTO and rebuilding international delivery rather than inheriting legacy CRICOS structures they did not design.

 

Funding is conditional, not guaranteed

Government funding has not disappeared, but it is no longer treated as inherently low risk. Contract renewal risk, outcome-based performance and skills-shortage relevance are now central to valuation.

Headline funded revenue is increasingly discounted unless supported by demonstrable completion rates, audit outcomes and diversification. Strong enrolments alone do not translate into strong valuations.

Buyers are responding predictably by structuring transactions to isolate funding risk rather than pricing it bluntly upfront.

 

Transaction structuring and shared risk

Deferred consideration, earn-outs and retention mechanisms have become common tools, particularly in funded RTO transactions. These structures allow buyers to cap downside risk while still rewarding vendors if funding performance is maintained.

This reflects a broader shift away from placing 100 per cent of transaction risk on the buyer. Where higher values are sought, risk is increasingly shared.

Vendors unwilling to participate in risk sharing are finding that price expectations are not being met. Conversely, buyers attempting to shift excessive risk on lower-value deals are often unsuccessful.

 

Technology, systems and data integrity

Technology is no longer a “nice to have”. Learning management systems, student management systems and the integrity of data flow between them are now core components of value.

Larger buyers are also beginning to assess cybersecurity and data governance as part of due diligence. While still evolving, forward-looking operators are addressing these areas proactively.

Business models are now clearly differentiated. Online providers, enterprise-focused operators, funded delivery specialists, CRICOS providers and niche trainers are assessed on their specific risk profiles rather than broad market multiples.

 

Practical interpretation for owners and advisers

The most common cause of failed transactions over the past six months has not been buyer price pressure. It has been sellers anchored to a version of the market that no longer exists.

Multiples have not disappeared, but they are being earned rather than assumed. Businesses with strong systems, low key-person risk and disciplined compliance continue to transact at attractive levels.

Preparation is no longer optional. RTO owners, regardless of sale timing, benefit from understanding their current value and the levers available to increase value and reduce risk.

 

Closing perspective

This is not a market in retreat. Demand for skills remains strong and the need for quality providers has not diminished. What the market is doing is reallocating value towards businesses that are well governed, well documented and operationally mature.

Value is no longer driven by size, history or owner reputation alone. It is driven by how well risk is understood, governed and evidenced.

 

Optional next step

If you would like to discuss how these market conditions apply to your specific situation, you are welcome to book a confidential meeting with Infinity Business Brokers to explore your options in a structured, no-pressure conversation.