Apollo CEO Explains Why $1.1 Billion Deal Makes Sense
After years of increased federal oversight and competition, a billion dollar deal is in the works to buy the parent company of the University of Phoenix.
If approved by shareholders and regulators, a consortium of private investors will pay $9.50 per share. Last Friday, Apollo Education Group shares closed just under $7.00.
"We think it's good news for all of our stakeholders," said Apollo Education Group CEO Greg Cappelli. "It represents an opportunity for us to join hands with an extraordinary group of talented investors that are long-term oriented."
The group includes Phoenix-based Najafi Companies, Apollo Global Management and Chicago-based Vistria Group, which is led by Tony Miller who served as deputy secretary of the United States Department of Education from 2009 to 2013. Miller is expected to replace Peter Sperling, the son of University of Phoenix Founder John Sperling, when the deal closes this August.
“I believe that this group of investors coming together has great talent; they take a long-term view," Cappelli said. "They have tremendous resources to continue to invest back into the university’s mission, vision, strategic plan.”
Cappelli said the University of Phoenix wants to become the most trusted provider of career-relevant education for working adults, a goal he admits will take years to achieve. Taking the company private means Apollo will no longer have to publicly report their quarterly earnings and reveal strategic plans.
Over the past few years, the University of Phoenix and other for-profit education providers have seen increased competition, tougher federal scrutiny and declining enrollment.