Apollo Education to go private in $1.1 billion deal

The Wall Street Journal later reported that Apollo Global Management, which is now unaffiliated with it, was in talks to buy the company.

Under the terms of the agreement, shareholders of Apollo Education will receive $9.50 in cash for each share of Apollo Education common stock.

One of the world’s largest private education companies, Apollo got its start in 1973. Once the transaction is completed, Tony Miller, chief operating officer of Vistria, will become chairman of the Apollo board. The company’s stock price has fallen 66 percent over the past year through Friday.

According to Elizabeth Baylor, the director of post-secondary education policy at the Center for American Progress, declining enrollment may partly be due to the improving economy.

“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”.

Shareholder rights law firm Johnson & Weaver, LLP has launched an investigation into whether the board members of Apollo Education Group, Inc. That was its third loss in four quarters. Revenue fell to $586 million from $714.5 million.

Earlier previous 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.

For starters, Apollo has announced it will take itself private, meaning its shares will no longer be sold on the stock market. In October the Department of Defense barred the University of Phoenix from using the tuition assistance program available to veterans enrolling as students. The company has said it meant to cooperate fully with the agencies’ requests for information.

For Apollo investors, this deal isn’t a bad outcome, given the myriad issues facing the company. Apollo Global Management had assets under management of approximately $170 billion as of December 31, 2015in private equity, credit and real estate funds invested across a core group of nine industries where Apollo Global Management has considerable knowledge and resources. For example, a year ago it pursued-though never closed-a deal for property mogul Nicholas Schorsch’s troubled real estate empire. Paul, Weiss, Rifkind, Wharton & Garrison LLP was the legal adviser to the consortium.

Matt Jarzemsky contributed to this article.