Digital education gets a leg-up today as 2U announces its plans to purchase local startup GetSmarter.

Looking at the deal it’s surprising to us that this acquisition didn’t happen sooner. Both 2U and GetSmarter bring high quality digital learning to folks around the world offering a variety of courses from international institutions such as Massachusetts Institute of Technology to local ones like University of Cape Town.

The merger then makes sense and you start to see the value that 2U sees when you take a closer look at the startup. To date GetSmarter has reached 50 000 students with pass rates that average 88%. Added to that the fact that GetSmarter reported revenue of $17 million (R227 million) in 2016 and its clear why exactly 2U is making moves to acquire the business.

Speaking of which, the deal between 2U and GetSmarter amounts to $103 million (R1.3 billion) in cash. There also an earn-out payment of up to $20 million (R267 million) in cash subject to achievement of certain financial milestones in 2017 and 2018.

To be clear GetSmarter is not being swallowed up by 2U, at least not yet. The firm will operate as an independent subsidiary of 2U in Cape Town.

GetSmarter | Stand Out from the Crowd from GetSmarter on Vimeo.

“GetSmarter’s pursuit of quality in online education, demonstrated by a uniquely high student course completion rate that averages 88% is truly remarkable and mirrors 2U’s mission to offer the world’s best digital education as defined by our partner students’ outcomes and satisfaction,” 2U co-founder and chief executive officer Christopher Paucek said.

“With GetSmarter, 2U expects to strengthen its position as a leader in digital education. We also expect to accelerate our growth, extend our global footprint and provide a broader suite of services by matching up more students to the right programs,” added Paucek.

The deal is expected to be concluded by the third quarter of this year.