Apollo Education to be taken private for $1.1bn

Feb 08, 2016, 2:20 PM EST
Source: John Ronald/flickr

Apollo Education will be taken private for $1.1 billion by a consortium led by private-equity firm Apollo Global Management.

Reuters reports:

For-profit education provider Apollo Education Group Inc (APOL.O), the owner of the University of Phoenix, said on Monday it would be taken private by a consortium in a deal valued at $1.1 billion. The offer price of $9.50 per share is a 36.7 percent premium to Apollo stock's Friday's close. Apollo Education's shares rose to $8.98 in premarket trading. The company had a market value of $754.4 million as of Friday's close. Apollo Education's shares last traded at $9.50 on Oct. 22. The consortium includes the Vistria Group LLC funds affiliated with Apollo Global Management LLC (APO.N) and private investment firm Najafi Companies. Apollo Education said in January it was considering selling itself after years of declining student enrollments. Apollo Education and rivals such as DeVry Education Group Inc (DV.N) and ITT Educational Services (ESI.N) have faced tougher regulation since a series of government investigations in 2010 revealed low graduation rates and poor job prospects for graduates, who were also burdened with high student debt.

The Wall Street Journal writes:

Challenges at for-profit colleges have continued since 2010, when the federal government began a crackdown on the sector. In October, the Defense Department said it had barred the University of Phoenix system from recruiting on military bases and prevented troops from using federal money for classes. The department last month said it had removed the University of Phoenix from probationary status, restarting the spigot of military tuition-assistance funds for the for-profit college operator. Earlier last year, the company, which operates on-campus and online classes, disclosed probes by the U.S. Federal Trade Commission and the California Attorney General’s office into its marketing and other business practices. The company has said it intended to cooperate fully with the agencies’ requests for information. Apollo Education, which is controlled by Chairman Peter Sperling and a trust through a special class of voting shares, said last month that a sale could boost its strategic initiatives including an international expansion and a plan to transform the University of Phoenix.