University of Phoenix Parent Company, Apollo Education Group, Sold to Private Investors
Posted By Eliana Osborn on February 9, 2016 at 12:10 pm
With revenue and enrollment down again at the end of 2015, University of Phoenix’s parent company Apollo Education Group announced plans to look for a buyer. Just a few weeks later a $1.1 billion deal has been reached.
Business Wire reports a group of private investors will purchase Apollo for $9.50 a share. The parties include Vistria Group with COO Tony Miller who once served as Deputy Education Secretary and will head the new board of Apollo Education Group.
The University of Phoenix soared during the recession as students enrolled in hopes of improving their employment options. They came under scrutiny over recruiting practices, especially involving veterans, as well as the high cost of earning a degree. Phoenix is one of the original players in the for-profit education market, leading the way from a small niche of career certification schools to offering even doctoral degree programs.
Greg Capelli, current Apollo Group COO, cited the need for flexibility in how University of Phoenix moves forward in a time of ‘volatility’ in the higher education market. Much of the expected growth for Apollo is in the global market where they are making purchases and building programs.
Miller recognized the perception of Phoenix and other for-profits in his announcement of the deal. “For too long and too often, the private education industry has been characterized by inadequate student outcomes, overly aggressive marketing practices, and poor compliance. This doesn’t need to be the case. We are committed to accelerating and enhancing efforts to establish University of Phoenix as the leading provider of quality higher education for working adults and to continue supporting the organization’s commitment to operating in a manner consistent with the highest ethical standards.”
The deal isn’t final yet, pending approval by the Higher Learning Commission and Department of Education, but Apollo’s board has signed off. Taking Apollo from a publicly traded company to a private one may help temper earnings expectations, according to the Washington Post. That, in turn, could eliminate some of the high pressure sales or recruiting issues that have led to complaints about Phoenix’s practices.