Apollo Education Group (APOL) Goes Private in $1.1B Deal

Shares of the Apollo Education Group (APOL) were trading up $1.95 or +28.06 percent to $8.90 per share in Monday’s premarket after news broke early this morning that the company would be taken private by a consortium of investors in a deal valued at $1.1 billion. Apollo Education Group stock closed at $6.95, down -0.14 or -1.97 percent in Friday’s regular trading session.

Founded in 1973 by John Sperling, Phoenix, Arizona based Apollo Education Group is one of the world’s largest providers of private educational services.
Through Apollo’s subsidiaries, the company owns a number of for-profit educational institutions including: the University of Phoenix, the College for Financial Planning, Axia College and Western International University. The Apollo Education Group’s institutions had approximately 270,000 students in early 2014 with the majority attending the University of Phoenix.

Apollo Education Group also owns UK based BPP Holdings, and entered into a joint venture with the Carlyle Group to acquire assets abroad called Apollo Global. Through the joint venture, Apollo acquired ULA College in Mexico and UNIACC College in Santiago, Chile. Apollo’s education programs are offered online, throughout North America and Europe, Australia, Africa, Asia and Latin America.

The deal announced this morning will have a consortium of investors led by The Vistria Group, LLC pay $9.50 per share in cash for all of the company’s Class A and Class B shares, a +30 percent premium over the stock’s 30-day volume weighted average share price. The other major participants in the transaction are Apollo Global Management — unaffiliated to Apollo Education Group — and Najafi Companies.

Greg Cappelli, Apollo Education Group’s Chief Executive Officer said in the company’s press release that, “The Apollo Education Group Board of Directors reviewed strategic alternatives and believes this transaction is in the best interest of all shareholders and strongly supports our transformation efforts. This new structure will allow Apollo Education Group the flexibility and runway it needs to complete the transformational plan at University of Phoenix, which will enable us to serve our students more effectively during a period of unprecedented volatility within our industry. We will also continue to expand our international operations and remain committed to driving principles of operating excellence.”

The newly private company will be headed by Tony Miller, The Vistria Group’s Chief Operating Officer and former Deputy Secretary at the U.S. Department of Education. Miller will become Chairman of the Apollo Education Group board upon the deal’s completion. The transaction is expected to close by the end of the Apollo Group’s fiscal 2016 year in August.

While the agreement has been approved by Apollo Education Group’s Board of Directors, the transaction is still subject to regulatory, financial and operational conditions, as well as the customary closing conditions. Other approvals will be required from the Higher Learning Commission and the U.S. Department of Education, state regulatory and accreditation bodies and Apollo Education Group Class A and B stockholders voting as separate classes.

Other News About APOL

Top Apollo Education Investor Urges Board to Resist Takeover

Schroeder’s Plc, the company’s largest shareholder urged the board to reconsider the sale of the business in January.

University of Phoenix parent company prepares for another round of layoffs

Apollo is planning to lay off about 70 people in various departments.
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Published on Feb 8, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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